Oversaturation, I think. By the time horse operas ambled off into the small-screen sunset, the networks had played out just about every variation on the concept. You could tell the genre had really hit the wall when they infused a standard Western with James Bond spycraft to create the 1965-69 series "Wild, Wild West."
An alternative interpretation is that Westerns never did stop being popular but simply escaped the confines of TV and film to become reality itself. After all, Ronald Reagan segued directly from being host of the Death Valley Days series to being emcee (governor) of California.
Carl