I put the death of Zip more on CD-Rs getting popular. Even if you didn’t have a writer you could read them. And then UsB thumb drives came in to clean house.
I think it was a mix of reasons: complexity (you needed scsi or parallel port available, CDR, internet, hard drive capacity increasing and evolution of work policies.
Zip drives were fairly expensive so weren't really a solution for archival. CDR and their immutability were more interesting for archival. Zip drives weren't useful for sharing data as they weren't OEM deivces so you wouldn't expect anyone to have the drive and it soon became easier to email files. So basically Zip drives were only useful as an extension of your own hard drive or to share files between 2 computers you owned that were equipped with a zip drive (say home and office). This has been gradually frowned upon by companies so this was only really a thing for people working independently. Additionally in the later years while the size of the usb flash drive could increase constantly, the zip drives had to evolve in parallel with the medias. An early adopter who had to upgrade from zip100 to zip250 then zip750 would have had 3 drives to purchase, even more so because of the click of death while a newer usb2.0 flash drive would work on an old computer with usb1.0 or 1.1 port.
I think this is probably right. Zip never quite got the penetration needed to take up the mantle of the floppy as far as I remember. And by the time it gained traction the CD burner was coming onto the scene in a big way. The market badly needed a higher capacity floppy like media, 1.44MB was a complete joke by the time floppy drives were killed. But if you had to choose between buying a zip drive or a CD burner the burner was the way to go. A burner was terrible for shuffling a few files around and early burning with janky disks and slow processors was a gamble, but copying games and albums or making mix CDs as well as the superior capacity just left it with broader utility than a zip drive with expensive disks had.
But CD-R and USB drives weren't mutually exclusive in my experience; a lot of PCs couldn't boot off of USB yet and early USB sticks didn't have the same capacity (I believe my first USB stick was 64 MB?). But, burning a CD was more involved, and re-recordable ones were expensive. Some time later we found you can buy spindles of burnable CDs for pennies per disk.
Zip drives were fairly expensive so weren't really a solution for archival. CDR and their immutability were more interesting for archival. Zip drives weren't useful for sharing data as they weren't OEM deivces so you wouldn't expect anyone to have the drive and it soon became easier to email files. So basically Zip drives were only useful as an extension of your own hard drive or to share files between 2 computers you owned that were equipped with a zip drive (say home and office). This has been gradually frowned upon by companies so this was only really a thing for people working independently. Additionally in the later years while the size of the usb flash drive could increase constantly, the zip drives had to evolve in parallel with the medias. An early adopter who had to upgrade from zip100 to zip250 then zip750 would have had 3 drives to purchase, even more so because of the click of death while a newer usb2.0 flash drive would work on an old computer with usb1.0 or 1.1 port.