I wonder if part of the problem was that it wasn't well advertised? I know I found out about Lilo's Playhouse from here and told DW. We reserved it at the same time we reserved BBB for our trip last year because we were afraid to miss reservations. DD loved it, one of her favorite memories from the trip. But nobody else I know had really heard of it.
I understand for many a trip to WDW is purely family time and no arguments from me how everyone treats their time there, but for us that evening was one we all looked forward to. DD loved the idea of an evening on her own, ordering dinner and getting to spending time with other kids. Meanwhile we enjoyed an evening with friends at Disney Springs and Trader Sam's. After 4 straight days of parks it was a fantastic break for all of us. We were excited about possibly staying at the Poly on our next trip and having a resort day in the middle of the week and she loved the idea of being able to stay until they closed this time.
We are cruising
DCL here in a few weeks and DD wants to go straight to the club because of her time at Lilo's. So we are pretty disappointed in seeing it close. Guess we will see what they come up with to replace it, if they do replace it...