It has been nearly a year since the most recent Play Edition device went on sale. The fact is that these device were sold at full retail prices, and most people aren’t going to shell out $500-600 at once to get a new phone. Well, I would and have, and other “power users” might, but that’s a small percentage of the market. Also, the Play Edition devices were not pure vanilla Android like the Nexus line, so you still had some things stuck on top of the OS.
I think that the Play Edition project was allowed to wither on the vine because of Google’s upcoming plan to offer wireless services. As a carrier, they can push updates out quickly and set up different models of purchasing the devices (subsidized, payments, full price, etc.) and the Play Edition program would be mostly redundant. I fully expect that the devices Google offers as a carrier will be essentially the same as Play Edition devices.