Although it's sad to see it happen, you gotta know it was coming.
Leica has been competing with itself for a number of years. The company builds a fine rangefinder camera but the initial new price is too high for most photographers to consider. Then there are lots of used Leicas out there on the market that cost less and, thanks to the plethora of Internet opinions, are often considered to be better built than the new cameras. They make outstanding lenses but they cost so much most photographers consider it to be an abstract concept to consider owning one. Again, there's a lot of used Leitz lenses out there with sterling reputations to compete against the new Leica lenses.
Compound this with the digital thing, the general pessimism surrounding film cameras, rising labor costs and God knows what other factors specific to Leica The Company, your market is sure to shrink.