I know what killed it, the lack of any real moderation (the moderation system was really the honor system).
I got in quite late in the game, in 2001, but as of today I still remember it as the best way to discuss over the internet that I have experienced. I agree on the lack of moderation being the weakness that made the noise surpass the signal. All the web forum software that surfaced on the 00's and beyond was mostly a response to that. If it weren't for this weakness, people nowadays would probably be using web interfaces to nntp just like they do to email, and we old farts could still be happily using our preferred news clients.
So while I applaud the ones who are trying to keep the system alive, this weakness (and maybe others), if not addressed, will pose a natural limit to Usenet growth and quality. If we start putting servers up and manage to attract good contributors back, the spam will follow and then the noise will drive them away again.
But yet, we are at such a point where bandwidth and storage is so cheap that reviving Usenet could be accomplished by a bunch of hobbists spending little money. If at least we could solve the moderation weakness. Does someone have any idea if there were any attempts at cracking this problem that were open source and effective?