There's a lot of nitty gritty policy weeds of what went wrong. But the main one was that after the public ISP incorporated in the 90s as a complimentary service to a public cable network, the state passed a legislation regulating public utility rates. Good for power/water/sewer/cable customers. But it meant that the city could not charge customers differently even with wildly different internet speeds.
Going into the 90s, as the internet aspects became more important, they couldn't keep up with upgrading the lines, especially given the costs would be born by all customers regardless of what speed they were getting.