If I remember correctly, their volume was slowly growing and one day somebody fat fingered a sell order at really really low prices, others had some buy orders ready to scoop up the super cheap bitcoins and thought they had made a killer deal. Somebody sent a message to the admins of the site and they reversed the transaction! Obviously this scared off everyone and now very few people want to use it.
This. It started off successful but the fat-fingered client got his trades reversed, and the counterparties lost money and exited the exchange.