When faced with the question of why Active Enterprises faded away so quickly, the answer is obvious: for the same reason that all small companies with big mouths usually go out of business. They tend to promise far, far more than they can actually deliver and end up choking themselves. Active announced three games, a pile of licensed goods and a portable system straight out of Fantasyland, all of which weren't released and probably never even seriously developed. And at the same time they were losing money right and left and had a warehouse full of NES games they couldn't sell.
It's obvious that Nintendo of America played a large part in killing unlicensed game manufacturers for the NES, but Active Enterprises didn't need any help. It killed itself perfectly - and made the collecting world a better place for all of us.