Warez, and porn. Neither of which are easy to defend when an ISP is looking to address the costs of a Usenet feed. Towards the end, we had close to 100 Mbps full time just for the feed, as I recall. Then we outsourced it to cut that cost. But then management decided none of our customers needed alt.binaries and we dropped it altogether. The effect on churn was negligible.

I'm not sure binares were too big of an issue - most server simply didn't carry groups that allowed binaries.

The spam issue was the real deal breaker imho - you either had a fully moderated group, or you had a fully unmoderated one with spam left and right.

Also, for me it was social media - web groups, however lacking the interface was, had more variety in their subjects.