The usual reason - slow sales. The magazines did not like the bike and told the world the 200 was better and cheaper. The 250 got very poor reviews due to the wide tank, poor seating position, etc..
Like the 200, from the factory the 250 was poorly jetted and needed some help in the fork department. The extra weight and slow steering did not endear the bike to hardcore racers.
With some minor tuning and preperation, the 250 can be made much better than stock. After dialing it in, I preferred mine to my 200's for most trails.