Some observations:
- Very bad performance at existing x86 workloads, so a major selling point was basically not there in practice, because extracting any meaningful performance required a software rewrite anyway. This was an important adoption criteria; if they outright said "All your existing workloads are compatible, but will perform like complete dogshit", why would anyone bother? Compatibility was a big selling point that ended up meaning little in practice, unfortunately.
- Not actually what x86 users wanted. This was at the height of "Intel stagnation" and while I think they were experimenting with lots of stuff, well, in this case, they were serving a market that didn't really want what they had (or at least wasn't convinced they wanted it).
- GPU creators weren't sitting idle and twiddling their thumbs. Nvidia was continuously improving performance and programmability of their GPUs across all segments (gaming, HPC, datacenters, scientific workloads) while this was all happening. They improved their compilers, programming models, and microarchitecture. They did not sit by on any of these fronts.
Ironically the main living legacy of Phi is AVX-512, which people did and still do want. But that kind of gives it all away, doesn't it? People didn't want a new massively multicore microarchitecture. They wanted new vector instructions that were flexible and easier to program than what they had -- and AVX-512 is really much better. They wanted the things they were already doing to get better, not things that were like, effectively a different market.
Anyway, the most important point is probably the last one, honestly. Like we could talk a lot about compiler optimizations or autovectorization. But really, the market that Phi was trying to occupy just wasn't actually that big, and in the end, GPUs got better at things they were bad at, quicker than Phi got better at things it was bad at. It's not dissimilar to Optane. Technically interesting, and I mourn its death, but the competition simply improved faster than the adoption rate of the new thing, and so flash is what we have.
Once you factor in that you have to rewrite software to get meaningful performance uplift, the rest sort of falls into place. Keep in mind that if you have a $10,000 chip and you can only extract 50% of the performance, you more or less have just $5,000 on fire for nothing in return. You might as well go all the way and use a GPU because at least then you're getting more ops/mm^2 of silicon.