Greyhawk floundered in the early 90s, and even the late 2e revival got only a lukewarm reception. This is due in large part to TSR not understanding the original allure of the setting. It is also due to the fact that TSR killed any real chances of the bare bones down and dirty style campaign settings like Greyhawk being popular with the newer generations of gamers by so ruthlessly promoting the heavily detailed, story heavy settings like FR and Dragonlance. A lot of newer gamers seem to want a world presented to them 'turnkey', where only minimal investment of time is required to whip up a campaign storyline and begin play. Greyhawk, being adventure heavy but story light, doesn't do well for those fans.
The problem is, Greyhawk was designed at a time when heavy role playing and story development was backseat to high spirited adventure and (let's face it) hack and slash romping through dungeons. Due, most likely, to Gygax's growing role as a businessman and then his untimely departure from TSR, Greyhawk went a long time with no real development beyond a steady stream of simple, story light adventure modules. By the time the tastes of gamers began to shift to high immersion storytelling in the early 90s, TSR seemed rushed to bring Greyhawk up to speed, and despite fine work (IMO, YMMV) by Dave Cook and Carl Sargent, it hobbled the setting. TSR followed that 'rebirth' with a series of products of varied quality (sadly, one of the best of the lot, Ivid the Undying, never saw print, and was only released in online, unformatted form, by TSR as part of the hype preceeding the relaunch in 1998). Longtime Greyhawk fans were divided and didn't provide the sales numbers TSR wanted, so the setting died.
About that time, the world was going through the first widespread stages of internet access, and despite some debacles caused by TSR's ill concieved attempts to protect their copyrights, a loyal (stubborn, opinionated and often divided, but surely loyal to the setting) community of fans started forming around the setting. Folks like Gary Holian, Fred Weining, Steve Wilson, Nathan Irving and Erik Mona (at that time, just a starry eyed punk college kid with a knack for research and fact finding in obscure Greyhawk texts, not the polished industry pro we know and love today ) began a movement that eventually led to the relaunch in 1998. Despite the best efforts of those guys, and TSR folks like Lisa Stevens, Roger Moore and Sean Reynolds, the relaunch failed to reunite the Greyhawk community (torn asunder by both disagreements over the wars/no wars greyhawk setting and, sadly, petty infighting between the movers and shakers of the community) and, more importantly, failed yet again to bring a lot of new fans to the setting.
Then came 3e D&D, and news GH would be the core setting once more. Also, WotC, having recently acquired TSR, announced that the RPGA would launch a huge new Living Campaign that would develop Greyhawk. Again, there was a lot of excitement, but the divisions remained, and in fact grew, since now we had yet another Greyhawk 'version' to argue over Yes, Living World (now Living Greyhawk) captured a lot of fans, but my theory on this is that they are fans of the RPGA style play, and shared world campaigning, for the most part, and not loyal Greyhawkers. Having been active in the online Greyhawk community for 3 or 4 years now and become somewhat friendly with guys like Holian, Mona and Weining, I can attest that the old divisions are alive and well, and regrettably, I would predict that any relaunch of Greyhawk as an actively supported campaign setting would fail. Some of the fans would love it, some would hate it, but more importantly, a lot wouldn't buy it.
Based on conversations I've been part of with Erik Mona, and things I've seen said by Gary Gygax and Sean Reynolds, I think WotC agrees with my prediction, and rather than risk a financial failure in reviving the setting, have left it in the capable hands of the RPGA and in a nominal role of being the core setting mainly to appease older fans and remain tied to the game's 'roots' while focusing their attention, and money, on more successful settings like FR and the new one coming out next year (whatever it's called, sorry, I haven't kept up, I'm a die hard GHer, new settings often fall beneath my radar).
Perhaps someday the fan efforts of people like the ones working on Greyhack, Living Greyhawk or Canonfire will bring enough cohesion and interest back to the setting to make it seem attractive to the folks at WotC, but until that day, we must accept the quality of the LGG and the handful of other Greyhawk scraps WotC has given us recently and embrace the work of other fans.
