Well, the Amiga isn't dead yet :-)
I've recently looked at some old computer ads from 1994-1996 and ultimately I think it was Commodores bankruptcy combined with lower PC prices and higher Amiga prices.
All of a sudden the kids could use daddy's PC to play games on (for example Doom, which I also think has a part in the "death" of the Amiga) so there was no need to buy a special "game computer" anymore. That, combined with the fact that you could get a very fast PC for less money than an A1200 with a hard drive, a decent monitor and some extra RAM.