I think a couple of people hired to to work on Linux graphics did not like dealing with legacy code (who does?) and somehow convinced their incompetent managers that everything has to be rewritten.^1 This went just like most "let's just rewrite it and it will be much simpler and better" IT projects. Now 15 years later or so we have a fundamentally inferior replacement (with probably nicer code though) which still misses essential features and plays catch up a, a simultaneously a serious lack of investment into maintenance of X, and also a lack of investment into user visible features in apps (I think gnomes pdf viewer gets its third rewrite, but still can't play embedded videos in presentation mode).

A lot of the user community was fooled into believing that Wayland would make graphics and gaming much better any day now ^2, which never really was based on sound technical arguments.

^1 This was roughly the time when everybody wanted to build new phone or tables operating systems to capitalize on an emerging mobile market. So maintaining stability for the desktop wasn't a priority.

^2 With grotesque nonsense claims about X such that the old drawing API slow apps down even though they are unused, etc. Those "arguments" were endlessly repeated and you can still see this even here, also everybody who ever implemented a GUI application in Linux should realize that this can not be true.