The number one reason, in my opinion was lack of brightness. Yet most of those mini-projectors managed to put out between 25 and 40 lumens, compared to today's pico projectors, which are running 8 - 12 lumens. In fairness to those mini-projectors, they may have been a lot smaller than the smallest traditional business projectors (mostly DLP projectors), there are business portables starting at under 2 pounds, with more than 1000 lumens. Not much of a contest.
The pico projectors, by comparison, are drastically smaller than the mini-projectors, and fit into a whole new world of portability. Still, 8 to 12 lumens isn't much to get all worked up about.
I think the longer term goal has to be to get these projectors up to say, 40 - 60 lumens. What a difference that would make. What it will take to get that many lumens out of projectors of this size, I can't say. History shows, however, that whatever size projector you look at, a few years later, there are smaller ones that are significantly brighter: Note, this is a fairly random sampling, not necessarily the absolute most lumens per pound projector available at that time, but chosen from the lightest business projectors around at that point
Battery Power as Related to Brightness
Above I showed two mini-projectors in the lumens per pound info.
What is important to note, is that the older Mitsubishi PK20 had a rechargeable battery included, while the new GP1 runs only on AC power, with a power brick (not included in the weight).
The important point here, is that while we can now cite several mini-projectors that claim 100 or even 200+ lumens, those models generally do not run on batteries, or if they do, it's going to be a hefty external battery pack. To get out 100+ lumens you need some sizeable batteries, and those batteries alone, are physically much larger than today's pico projectors. Thus, we need much smaller batteries than today, with the same amount of juice, or we need to make the pico projectors far more efficient. Most likely we'll need both.
I can tell you, right now, that my opinion is that more brightness is the key for success for these tiny pico projectors. If they have to add an extra quarter pound, or even a bit more, to triple or more their brightness, I think that the market will move in that direction.
I do, however believe that for this class of projectors, battery power is almost mandatory for success. Perhaps adding an inch to length and 1/2 inch to height would allow a big enough battery to get us to that 40 - 50 lumen range that I think most people would be fairly comfortable with for this class of product.
What I'd really like to see, however, is a 0.5 - 0.75 pound projector as just described, that can match or come close to the mentioned BenQ GP1. That projector's 100+ measured lumens produces an image drastically brighter, and bright enough to satisfy most portable projecting requirements, including presentations to small groups. I should note, however, that the BenQ's weight jumps to a bit over 2 pounds when you add in the weight of their power brick (remember - no batteries for the GP1).