The video length was pretty limiting, though. Instagram at the time started doing 15 second videos. The six seconds lent itself to goofy comedy and not much more.
It seems like they should have sold it. Or just jammed in a bunch of ads... maybe an option to remove ads with a paid membership. Simply killing it doesn't make any money other than to avoid losing more, and they'd already invested a fair bit which you can't recoup by just closing something. Of course, Google does that all the time I guess.