I think the shifting "product focus" is probably the main factor here, simply because such a service being used for malware hosting was completely predictable from day 1. When they started they probably thought that it was worth it, then later on they changed their mind. That or they were incredibly naive.
In the context of a large corporation, incredibly naive is just an euphemism for bad management. They launched it. An internal security audit found that it was being used for phishing. They planned to fix it but layoffs came along and they had to sunset Send.
That means no security at all. Without a way to link files being hosted to identity or inspecting the contents of the files, there is no barrier to prevent spam and illegal files from being hosted.
I don’t know. The internet had hundreds of file sharing sites at one point. They all suffered fates similar to the epic MegaUpload although with not as colorful founders as Kim DotCom.
I don’t see how having them again would be different than last time?
Mediafire is still alive and I think it's the last hold out from the "big" file sharing websites of the mid/late 2000s. Though honestly I don't miss the download limits, timers and adf ly spam that came with them. Common cloud storage (gdrive, dropbox) are much easier to use and share files from, although they require you to be logged in. Send seems to be the best of both world though.
Quick summary: it was being used for malware and phishing, aggravated by the trustworthy-seeming firefox.com URL.