Brian Shih was the Google Reader Product Manager for about three years before leaving Google in 2011. He explained why he thinks Google Reader was shut down based on his experience working with the team for about three years. He makes it clear that he doesn't know the reason but he is speculating based on his long time spent with the team.
Why was Google Reader killed? Because the engineers who worked on Google Reader understood social and sharing better than anyone else. He said, within Google Reader, sharing was easy, fluid and very popular. That was until Google removed most of the sharing features when Google+ came around.
Brian said that most likely the Google Reader engineers did not want to leave the team to work on new things but rather they were forced to. He said it happened at least three times in his tenture there.
- 2008 - let's pull the team off to build OpenSocial
- 2009 - let's pull the team off to build Buzz
- 2010 - let's pull the team off to build Google+
It turns out they decided to kill it anyway in 2010, even though most of the engineers opted against joining G+. Ironically, I think the reason Google always wanted to pull the Reader team off to build these other social products was that the Reader team actually understood social (and tried a lot of experiments over the years that informed the larger social features at the company). Reader's social features also evolved very organically in response to users, instead of being designed top-down like some of Google's other efforts.
Okay, so now I know it wasn't all my fault. ;-)
Forum discussion at Quora.