Kinda late to the discussion, but this is what I think is wrong with zOMG:
1. If you want to get a player base, don't name your MMO zOMG for crying out loud! What do World of Warcraft, TERA Online, City of Heroes, League of Legends, heck even Runescape have in common? They all sound fun, cool and epic. Even weirdly named MMOs like Rusty Hearts or Flyff sound fun. zOMG sounds so ridiculously noobish and laughable that it turned away a lot of people outside of Gaia. I had this sentiment from day one. Titles really are everything.
2. They tried too hard to make it "casual" and "appeal to everyone". For example, the rings. Water balloons and beehives...really? People play adventure games because (feel free to disagree) they would like to do the things in them themselves if it were possible. Who wants to throw water balloons at enemies?
3. In the end, they forced it to become a social game through tons nerfing. Some people like to solo in MMOs. When it becomes impossible to solo anything mid to end game, then solo players stop playing.
4. Too many bugs.
5. There wasn't constantly any new content when it first came out. Most MMOs have some sort of updates with small events and new items every week. We had holiday events, but that was it.
6. The release date was terrible, but since they wanted zOMG to be "casual", they didn't think those players would be playing zOMG. There is a niche audience for MMOs and a majority of them play WoW, so...by labeling something as "casual" isn't going to bring in a completely different audience.
7. It needed a class system instead of "hm, I think I'll have a few heal rings, some ranged rings and then a melee ring and I can kill s**t and never die! hurrrhurrr!" The set bonuses kinda put you in a class, but...meh. Not good enough.
8. More things like the intro needed to be released or used as cutscenes through the game. That intro was so epic and it got a lot of positive attention. Too bad nothing else was ever made like that.
Go watch it again and be sad nothing else was made like this. I'm going as far to say that it has one of the best MMO intros ever.