With all due respect, it looks like you just read through the last handful of pages where the people who knew what actually happened stopped explaining it to the few who have no clue but like to make up reasons.
To summarize, Disney management killed Pleasure Island through a series of short-sighted business decisions, beginning with the decision to open the island to everyone for free. They thought they would get locals to come spend money, but what they got were teenagers getting dropped off by their parents using the island as a local shopping mall/babysitter. More than anything, this ruined the atmosphere - people wanting an "adult" place to go (kid free) while on their Disney vacation, lost a good portion of their reason for going. Plus, these teenagers (comparatively) spent less money because they don't buy alcohol. Simultaneously, management began cut-backs (as they had in other areas of the resort) like removing the nightly stage entertainment and New Year's Eve celebration; this removed more of what made the island a unique experience. Result = less customers. Finally, Disney management became proponents of a business model where outside third-party vendors would come in, lease commercial space, and provide the food and drink for the customers. Obviously, they felt it's easier (and maybe more profitable) to lease land than to have to run these eateries and bars themselves (including management responsibilities). Whether or not that was a sound long-term business plan (I would argue it was not), really didn't wind up mattering, because in the short-term it was a disaster. Disney closed their clubs without having lease agreements in place, the economy tanked, the few outside vendors who were interested pulled out, and Disney was left with a Pleasure Island ghost town ($0 profit) for the better part of the last two years with no end in sight.
In short, they got greedy, lost their focus, and blew it.
I'd suggest reading back through the thread and ignoring every post started by jt04. As memory serves, there's plenty of good information towards the middle about what actually went down.