Very high airtime costs. The system has great coverage, but low bandwidth. Also, the handset has to be able to see the sky. When Iridium was planned, it was expected that most mobile units would be vehicle-mounted, not handsets.
Motorola expected to sell a lot more hardware (read phones) and when there wasn't demand they cut bait.
IIRC the antenna was also _huge_ making it completely unpractical for handsets.
Not that big. The small antenna was a primary feature of the system. They even make candy bar style phones with built in antennas.