First, the market that optical was trying to address was basically data archiving of emails, old files, images, and compliance-related information. Certainly it is a growing market, but one that has changed entirely over the last 10 years. I believe that optical has not been able to keep up with the changes.
Archiving has changed on two fronts. In the 90s, you archived because it was the right thing to do. You could not afford terabytes of disk space, so clearing out primary storage was worth the effort.
Second, we didn't have the amount of regulation that we do now. Most importantly, these new regulations are enforced -- when people start going to jail or paying big fines because of sloppy data retention, it becomes important.
These new requirements led to a "keep everything" mentality that optical did not have the capacity or speed to keep up with, and data centers began expanding their primary storage. For a while, optical still had a role to play in the retention space because of its ability to easily scale (just add a blank platter) and support WORM media.