Well, I just got a Roku SoundBridge M1001 and am now somewhat sadly surprised to find this thread and the news that the SoundBridge will be discontinued.
Still, I love the product and will happily use it until the day it dies (which, given the problem I'm having with the optical line failing, may be sooner than I'd like).
Having been in businesses where holding things up by the bootstraps is more common than not, I can appreciate the need to terminate a product that is not making money (which was the purpose of why the product was created in the first place). While customers may not be happy with the weak confirmation by management that the SoundBridge line has a limited horizon, I can understand that too. There are some assets left in the product (R&D, patents, hardware, software, customer base, etc.). So the question may well be what remaining value can be extracted from all that before dropping the axe. Hence, until some decision about that is made, there is reluctance to remove the goose from the cage.
Additionally, I know first hand that marketing a good product can be extraordinarily difficult. Channels may not be receptive, especially if the product's function and market fit isn't easily understood by old-school channel types making the decisions to carry the product. Distribution and retail margins also may not be high enough to justify the sales effort, especially if the public isn't banging down doors to buy up the product. Lots of things can go wrong, no matter how evangelical the marketing team may be.
I think the SoundBridge has (had) a great price point and does what it is designed to do quite well. But how many average Joes out there know enough about networking to set this product up? For someone with a little bit of networking experience (like setting up a router), it isn't too difficult. But those folks are far fewer in number than we'd like to believe. For the technically adverse (and that still is most folks) it can be like stepping into the Twilight Zone. This is probably reason #1 why it didn't sell too well. Too much consumer education is required to sell it to the average Joe, and the support cost to get the average Joe to get it working right may have been too high too.
It doesn't help, either, that the user documentation is rather thin (not even a schematic showing the connections at the back of the unit!). Without initiative, the average Joe has challenges.
Moreover, I think this product was a bit ahead of its time, particularly with respect to Internet radio. Kind of like a chicken/egg scenario. When the general public is still getting up to speed on the possibilities and access to Internet radio, selling the hardware to play the content can be difficult. This is probably reason #2 why it didn't sell well: there just isn't a large scale awareness of Internet radio content yet among most folks.
All that said, awareness of Internet Radio will reach a tipping point (really, it only has just started coming into its own in recent years). When that happens, perhaps in the next couple of years, this kind of product will have a better fit in the home than before. I originally got it to play my library of MP3s from a home NAS without having to turn my PC on, but after plugging it in and discovering how easily I could receive feeds of Internet radio stations without using my PC as an intermediary, I haven't turned this product off (I literally have it running 24/7). Still, the fact of the matter is that I didn't get this product first to listen to Internet radio (which is perhaps telling in itself); that was just a happy bonus. Now it is my number one use.
Timing is everything. Roku may be bowing out of this market licking its pioneering wounds, but others will step in if money can be made. Most businesses follow markets; few can make them.