The "Blame Tokyopop for Bad Translations and Deserved To Go Under For It" crowd confuses me a bit, because Viz survived this, guys. <i>Viz</i>.
Borders was probably Tokyopop's biggest distributor, and I don't think that it's a coincidence that they're having problems, too. This, added to the aforementioned Scanlation and "Grazing" issues, made for a recipe for death.
Price points didn't help, either. At a relatively reasonable $10 per volume, and 20+ volumes per series, things get pricey quick. I'm not entirely sure that there's much that publishers can do to reduce this cost.
Perhaps it would behoove somebody to look at things differently and explore a monthly subscription-style Manga service in the US and hire on some of those Scanlators.