HD-DVD died because the industry collectively worked to kill it as a proprietary monster that would enslave users, studios, and developers to Microsoft's software. It wasn't a simple disc format struggle.
The public wasn't aware of what was going on behind the scenes because Microsoft worked diligently to spin a misinformation campaign that suggested that HD-DVD would be cheaper, more open, and deliver more content. Backers were fed talking points that insisted that HD-DVD discs were cheaper to create, that the Chinese would pump out ultra cheap players to support Microsoft, and that HD-DVD's DRM was somehow easier to get around than Blu-Ray. This was all false.
When charged with the reality that Microsoft is nothing more than a marketing organization pushing inferior technology tied to proprietary standards that will later be leveraged to extort higher prices, the company responds with a smoke screen that declares that its products will be first-to-market and supported by lowballing Chinese manufacturers. At the same time however, Microsoft has only ever delivered late, inferior products that have a higher total cost of ownership. Its supporters have worked hard to bury this reality even as Microsoft continues to raise prices on poor products that have limited competition, such as Windows Vista.