And one of them was the fact that the "stable" update servers for MeGUI went pretty much dead of any updates for quite some time, at a time when x264 did get some miscompilations fixed and all kinds of useful features added. And when they started re-updating their system the damage was already done -- and the best thing is, I'd guess many people still use the last versions of stuff from the last "stable" update (which would be more than half a year old), just because they do not know that they should update their URLs or switch to "development / unstable" branch for updates.
And even if you do use the development branch for updates, supposedly (from what I heard, I don't use MeGUI anymore), the latest update will screw over all your profiles leading you to a whole stack of errors on the next load and no working x264 profiles.
Another thing was the amount of bugs in things. MeGUI, while having interesting features, did have some famous bugs such as the "This is video is not YV12"-loop or random failures at creating chapters and other features (which I thankfully didn't really seem to use, leading me to a somewhat positive opinion on the application).
From what I remember of it when I still used it (a long time ago), it has an annoying audio bug where in the channel settings, if you use anything other than "keep original channels", it'll normalize your audio even if you set it not to. Also remember crashes when loading avs scripts with certain filtering, and also various bugs to do with the profile system.
How about as a GUI batch encoder?... Otherwise you could just make some magic with batch scripts or shellscripts and be happy with that.
Yeah, that. Wrote myself a batch script for that purpose, can set up conversions for a whole series (say 24 episodes), including batch filtering (eg. resize, since I encode for PSP), in 15 seconds. Meh, works great for my purposes, I'm happy.
Another reason: x264 presets and tuning system is very easy to use, there's no need for bloated GUIs anymore, IMO.
You must realize a lot of the user base are beginners, and they probably need it for the audio encoding, filtering (auto crop/deinterlace/IVTC?) and muxing too. Tell them to write an avs script themselves, and they'll be like "errr... avs script?" So a GUI is still definitely needed.