More broadly speaking, Reader’s ultimate fail is the latest major rebalancing of the internet’s legacy symmetry of “push” and “pull.”
RSS has always been a useful time-saver for voracious internet binge consumers. Rather than circling among dozens of websites and suffering through tiresome page loads at each URL, RSS adherents can skim headlines at the hub of a giant content wheel, and in many cases (depending on how the feeds were configured) read entire articles without leaving the RSS service.
The whole arrangement, particularly that last part, was terrifying to publishers, who saw an ad-revenue future burned away in a stark landscape of text-only syndication.
Another well written piece on Google’s decision to close down Reader but also on RSS (vs. Twitter) as well.
That last paragraph is an important piece of this: RSS applications aren’t showing entire web sites with sidebars with ads, they’re just showing new posts in the body of a web page. Advertisers would rather you went to a site directly so they can serve you up ads. Another reason to love RSS and feed readers is they allow you to avoid loading web pages just to see headlines, you can browse those in the RSS reader only clicking through to sites you want to visit.