Progressive talk failed because (1) The radio establishment and advertisers did not want it to succeed and (2) They tried to do liberal content with the same approach used by right-wing hosts. To use the music format analogy, that would be like having Top 40 jocks on a classical music station.
Everyone wanted Air America to succeed.
Owners saw it as a way of having another potentially profitable format for AMs. Many groups had acquired multiple AMs in the larger markets and often had one less viable format than available stations.
Advertisers liked the idea a lot. They saw it as a way to stress rates if true competitive situations arose. It is always easier to negotiate rates if there are multiple buying options.
The opinion you give on content and style is simply your opinion. Many believe that the issue was that Air America did not do its variety of content more like the style of the best conservative talkers; they were perceived as too serious and intense and not fun and entertaining.
But even that analysis neglects to mention that perhaps progressive / liberal listeners don't want a talk format directed at them. The ratings for MSNBC vs those of Fox News could be, in some part, evidence of either less interest or a highly fragmented left.