Because it did fail.
Whether the revival of interest in mysticism, esotericism and the occult that fell under the umbrella term of the New Age, roughly lasting from the 1960s to the end of the millennium, was something that was divinely inspired which went awry because of a failure to live up to its ideals or whether it was just a response to natural cycles or maybe an attempt by dark powers to divert spiritual aspiration into psychic channels, one would have to say it was not a resounding success in terms of fostering real spirituality. For some people it might have been an inspiration to higher things but only if they went beyond it as it was in itself, using it as a springboard to greater understanding and leaving it behind like milk to meat in St Paul's analogy. But there is no doubt that, in itself and its attitude to the spiritual world, it was shallow and self-indulgent.
The New Age was born from two things. The descent of religion into dull conventionalism and outer observance and the increasing desire of a substantial minority to experience something of the reality that was thought to be behind the original religious impulse. I have no doubt that the widespread consumption of psychedelic drugs fed into the process too. The whole thing was given a boost by the increasing availability of spiritual books written from the perspective of a variety of traditions and also the exposure to Eastern religion of large numbers of people. This had all happened before, coincidentally or not during the same decades at the end of the 19th century and then to a limited extent and only amongst the intelligentsia in the 1920s. But at the end of the 20th century it was more widespread and open to most sections of society.
The keyword of the New Age would be experience. People wanted spiritual experience. This is fine up to a point. Personal experience can give the subject greater individual insight into the structure of reality and confirm what religion only teaches about. But the important thing about experience is the experiencer. Why is he seeking experience and what does he do with it once it has passed? Does he seek to repeat it for the pleasure he gets from it (even if he calls that 'bliss') or does he use it to learn more about himself and the world? If the latter, what sort of things is he looking for? Knowledge, power, higher consciousness? This was the primary problem with the New Age. It attracted people to higher things who were motivated by their lower nature and it did not do enough to discourage that or instruct its adherents in the proper traditional ways of spiritual development, particularly when it came to the purification of the aforementioned lower nature.
People were in it for what they could get out of it. That is not a good approach to the spiritual path which should be based on the love of God.
The New Age emphasised immanence over transcendence. As a corrective to past over-emphasis on transcendence, this was good but it had a fatal flaw. The focus on human potential and subsequent demotion of God left it exposed to self-absorption and narcissism. It may have talked about transcending the ego but if it's the ego itself who is behind this then it's like trying to make yourself taller by standing on your head. There is also the problem that when you prioritise the immanent nature of divinity you fall into the ludicrous trap of believing that you make your own reality. There is no real objective truth to which you have to coordinate your being. Reality can be what you want it to be. This was another widespread illusion associated with New Age thought.
This dismantling of the objective nature of reality was a major contributory factor for the strong correlation there is between the New Age and leftism with its Utopian idealism based on bending truth to ideology. It also partially explains why the New Age was so easily corrupted by the sexual revolution, not seeing any real conflict between sex and spirituality or even regarding the two as somehow interlinked so you can have such travesties as sacred sexuality with no recognition of the inherent absurdity of such a thing. That's because there is a relationship between sex and spirituality in that they involve the same energy but going in different directions. Either up to head and heart or down to the sexual centres. Just as water cannot run in two directions at the same time in the same river nor can the creative energy. This doesn't mean celibacy is required for spiritual aspirants but control and the submission of lust to love certainly is.
And there is one final fatal flaw in most New Age spirituality. The absence of Christ who is either ignored altogether or just reduced to a spiritual teacher, one among many, teaching higher consciousness like a guru. For us in the West (and maybe elsewhere but the New Age was a Western thing), genuine spiritual transformation, call it salvation, is only possible through the Logos as incarnated, spiritually as well as physically, in Christ. There are other forms of spirituality but none that actually save the soul in the sense of redeeming it from this world which term I use to include the psychic dimensions that surround the physical realm just as much as the physical realm itself.
In many ways the New Age was a return to pre-Christian forms of religion but there is a big problem with that. These forms, call them paganism, served a purpose in the time before Christ but Christ's advent changed everything. The necessary approach to spirituality changed which is why you cannot go back. Christ really did bring something different and new and better and all earlier religions were put in his shade. They had served their purpose but they now lacked something vital. The institutional shortcomings of the Christian religion are well-known but its essence remains as true as ever and there is nothing else that can substitute for it. And there is no substitute for Christ. The New Age ignored this which is the primary reason for its failure.