My (probably flawed) understanding of the party line is that a contributing factor was that to make them authentic, Felicity's accessories cost more to make than many of the other girls.

You're probably also right about the lack of connection with today's girls also. I mean, I know a lot of <s>girls</s> women who are interested in her time period, but we're all into pirates and fantasy and re-enactments and such too. (Read: We're Geeks, and have been most of our lives)

So lack of connection + Higher prices = lower sales = insufficient profits = Felicity's near retirement.

At least, that's how I see it.