I think it's mostly about the way negatives worked with the analog print processors that were dominant up into the 90's. Once all the consumer labs went to digital, there was no practical disadvantage to using positive film for making prints. The workflow is identical. The colors are corrected the same way. I don't remember what film prices were like in the 90's so I might be off base here, but it was probably primarily the difference in price for E-6 film and processing that prevented it from becoming dominant once digital printing became the norm. By the time the analog minilabs were all phased out, digital photography was already starting to threaten the film market, and another revolution in the industry just wasn't in the cards. Had there been another generation of development at the industry's peak, I do think positive film would have become the dominant medium.
Prices for just about ALL photographic films (size, speed, type) were FAR less expensive in the nineties. Adjusted to inflation, the least expensive they would ever be, especially If you ordered it by mail. If you find a photography-themed magazine from the day, look at an ad for
The Film Shop. If I remember correctly, I was paying about $2.50 for each roll of Sensia 100 24exp 135, and getting it processed and mounted for $2.29 at Drug Emporium.
From the introduction of 35mm Kodachrome in the late 1930s to about 1960, slides were considered to be the only practical and economic way for the average person to go color. Kodacolor film and prints had been around for some years, but the prints were expensive (since each print had been being made manually, IIRC), and the prints were hampered by poor dye image life.
EK would improve Kodacolor products in the later fifties, but still did not spool Kodacolor onto 135 until 1958.
Note that at this time, most family pictures were still black-and-white prints. Kodak started doing extensive promotional work on Kodacolor, seeing that mothers love handing out prints of their growing kids, and knowing that color negative technology did have practical advantages (exposure latitude, color balance correction in printing, enlargement to any reasonable chosen size, etc.)
1963 was the year that the lid was blown off the pot. Kodak introduced a faster Kodacolor (Kodacolor-X, ASA 64) and a new line of cameras and film cartridges (Instamatic/126) that together worked well with less light than older Kodacolor products. This came the same year that Polaroid introduced its first instant color print film. In very little time, color pictures were the norm and monochrome was seen as an "art".
(Oh, I forgot):
The dearth of one-hour-photo C-41 labs in discount and drug stores was most intense in the years either side of about 2010, as d****** cameras took hold and C-41 work load became too slow for a mini-lab to be profitable