Exactly the business model wasn't strong enough, just upselling templates for hundreds of dollars which AI can churn in few tokens was easy to disrupt.
It isn't just the product itself: he's saying traffic to the site has dropped substantially, so any product will be harder to sell now for them.
Some people who would buy the higher quality templates don't know that they exist now.
The business model is strong. AI is stealing traffic/money from creators. That's not a problem with the business model, it's a problem with AI. AI hyperscalers shamelessly monetize other people's work without compensation. Truly an awful dystopia.