The death of SW toys is a sad, long story culminating in a number of factors...
1. Hasbro cheapened out on us. That's really the biggest problem. Hasbro. Is. Cheap. And it's the worst with their licensed lines. In 2015, Hasbro got the Jurassic Park license taken away by Universal. The number one reason: Hasbro made cheap crap that nobody wanted to buy, not even the most die-hard completist collectors. Hasbro took a license they were already putting minimal effort into just so nobody else could have it, and made it worse. And now they're doing the same with Star Wars. If it's not Transformers or Ponies, Hasbro doesn't care. I legitimately think that Hasbro doesn't want to do licensed toys anymore, but they also don't want anybody else to do them either. So they're just content to sit on the license, toss a bone every once in a great while, and let the ends justify the means.
The problem with not putting effort into your toys is that it becomes a situation of self-sabotage. Hasbro makes bad toys. Kids don't want bad toys, they want good toys. Parents aren't going to spend money on bad toys, either. So nobody buys the bad toys, and it allows Hasbro to justify making bad toys because, "well sales are down anyway." This way, Hasbro justifies their self-sabotage to share-holders. No money going in equals no money going out. It's self-fulfilling BS.
2. Disney is an easy target to take pot shots at simply because they're the stereotypical evil corporation, but there's no denying that they made a bad situation worse. The reason Jurassic Park toys got better is because Universal noticed Hasbro license-sitting, and putting minimal effort into the license for 15 years, and took the license away and gave it to Mattel. Now Mattel is making money hand over fist on figures Hasbro had deemed "unsellable" like sauropod toys, and large scale figures (dubbed the "Super Colossal" line). But Disney is apathetic. They don't care, because they have money pouring in for Star Wars from a half a dozen other places. Games, Disney+, continuing home release sales, franchising, licensing to dozens of other merchandizers from Dole pineapples to cotton beach towels.
If you want another example of just HOW apathetic Disney can be, look no further than the Anovos situation. What Anovos has been doing doesn't just reflect poorly on Anovos, it reflects poorly on LFL, on Star Wars, and yes on Disney. The mouse is printed there in the licensing print too. But they don't care, because money rules all. Collectors whining about a lost few hundred thousand dollars is NOTHING compared to what Disney is raking in.
3. Electronics > toys. Kids don't want toys, anymore, they want electronics! They want to shove their nose into an iPad the moment they can lift them to face the screen. You see it everyday. Babies who aren't old enough to even speak, let alone type, enthralled by flashing mobile screens. Parents know it, Hasbro knows it, and Disney knows it. Physical toys are a slowly bleeding market. Instead of using this fact to make BETTER toys to keep up, toy companies are either joining in, or giving up, and it seems Hasbro is doing the latter.
Up until the Disney buy-out in 2012, Hasbro was making some of the best Star Wars toys they'd ever been making. Then something changed. I can't say for certain it was Disney directly, or if the license change made Hasbro nervous, but it was right around then that Hasbro really just stopped trying, and they never started again.