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Dancing makes you Force Sensitive.
No discussion of why SWG failed would be complete without mention of the mad system that the developers introduced to allow players to play as Jedi. Now, when the game was launched, there were rumors that it would be possible to play as a Jedi within SWG, but no one was able to figure them out. The discussion was comparable to that around the mythical cow level of Diablo 1 - some people thought that it involved speaking with random NPCs, or picking up random pieces of junk and putting them in odd places. In reality, the system had simply never been implemented. The one that was... was, well, rather bizarre.
It was revealed that players would have to master a certain number of professions in order to unlock the jedi slot on their character. Their jedi would be subject to permanent death if killed a certain number of times, but the character itself would supposedly be quite powerful once it reached its full potential. That was later amended several times. Players could find out which professions they needed to grind by finding holocrons as random loot drops that would then tell them what profession they had to master in order to further their path through the force.
This made it so that tens of thousands of people went on a murder spree, farming the poor denizens of SWG endlessly in hopes of getting more holocrons. Once they figured that out, they would then master random profession after profession in order to get closer to attaining their jedi character. Yes. Some players had to become master chefs, dancers, armorsmiths, carbineers - whatever. It enticed players to stimulate the in-game economy greatly, but it burnt out a great portion of the player base as they all raced to unlock their jedi slots before their friends did.
This made it so that the players that unlocked their Jedi could easily wipe the floor with those that didn't. It simply wasn't very fun - even for the players who got to control the superhuman jedi in the days before just about everyone managed to unlock them. The players that didn't engage in the mad holocron grinding felt like they were second class, and the people who unlocked their jedi found that it didn't really mean as much as they thought it would. The community forums were also in constant conflict over the role of jedi in the game, which further deepened the rift between the players and the developers.