As far as the magazine goes...
...I have a theory.
Ironically enough, the magazine never appeared in the local comic store. Yes, you could order it, but I only ever saw it on the newstand in the local Chapters (the equivalent of a Barnes and Nobles for you yanks). Even then, they got it earlier than the comic store when they first tried getting issues in. They have no problem with the Dungeons and the Dragons, but SWG never seemed to get the shelf space.
As to the content, I've only seen a handful of the handful of issues released, but I think their content was way too split on all the possible Star Wars paraphanelia that's out there. Granted, Star Wars fiction seems to be one heck of a cottage industry if the book store is any indication, but I know I don't like seeing it in my magazines and from what I've read, I'm not alone. And there there is more coverage of the movies, of the video games, of the card games, yada yada...
What game stuff I saw, I really liked. But there just wasn't enough of it. And there was probably too much game stuff in the magazine to appeal to general fans who might be interested in the other stuff. Add to this that there, if I read correctly earlier in the thread, already another Star Wars fan magazine, and that can't be good. With the split focus, I think it may have hurt them in the long run - trying to capture both markets but in the end not providing enough material to keep either interested.
As for the new edition. Hrm. I won't be buying it. I just bought the original last year. I don't mind shelling out $55 CAN for it, but you won't catch me doing it twice for something with only errata corrections and different pictures. I like the idea of an Unearthed Arcana suppliment. That would have made sense. Or each movie getting it's own source book. Or something. A brand new core rules seems...foolish, IMO. But, WotC may not have a choice in the matter. Plus, if E2 does take off, the new pictures may win over those who didn't get into it the first time 'round.