If I remember correctly, the whole reason Sony now owns Vegas, etc., is that Sonic Foundry decided to pursue a new business. That new business didn't ramp up as fast as they expected, but was requiring a huge amount of cash. That cash drain pushed them to the brink of bankruptcy, so they sold the original, profitable business to Sony, and used some of that cash to keep the new business going under their original corporate name.

That is from memory, so I may have butchered the story, but I think the essence is correct.

So, it is that spun-off business that is finally going under. I don't think it ever really took off. It's a darn shame because the really great business that Sony bought was never the same after the acquisition: although Vegas (both pro and consumer) has seen lots of development, the development followed a much more "corporate" trajectory, with more efforts put into supporting various Sony formats (e.g., 3D, etc.) and less into enhancing the features that made the original Vegas such a wonderfully productive editing platform.

My take on the the "Sony" spin-off, and this is probably just paraphrasing johnmeyer, is that they:
1. gained "helpful" guidance provided, often misguidedly, by Sony designed to serve other products and corporate objectives, and
2. lost the passion to be the best at their core business.