Because they were hacked in 2011 and kept their losses silent. Keep in mind in 2011 500K BTC was "only" a few million dollar, and Gox probably thought they could earn that back in trading fees in a few years. Had the price remained roughly where it was, it might even have worked, but as the price rocketed from <$5 to >$500 that few million dollar hole became a quarter of a billion.