I don't think it was the only factor -- from what I remember and what I could see from the outside, the person who owned GJ wasn't very familiar with web development and maintenance/administration on the necessary scale, and so when GJ started getting larger, he was very out of his depth. (Running a site on the scale of even GJ/IJ/DW, much less LJ, is hard, and takes a skillset that you don't get from running a static website.) But I think the high number of icons with no income other than advertising revenue is ultimately what killed it, because there was just fundamentally no way for them to take in the necessary revenue.