They bought Jelsoft. They ruined vBulletin because they
- didn't know how to run a forum development company (clearly, otherwise they would have done a better job),
- had shareholders to keep happy (and had to deliver vB4 in a shorter time than it would take to re-write it, and a rewrite was the best way forward)
- (most importantly) didn't appreciate that the staff of Jelsoft were the most valuable asset that they had acquired, and instead of listening to and nurturing them, forced them out.
They IB tried to ruin Xenforo by suing them. My animosity towards IB remains at a relatively high level.
@Sim, yes purchasing Jelsoft was most likely a good business idea
if they could continue developing the software of the same quality. But they clearly couldn't. A whole bunch of IB owned forums are still on vB3. Probably trapped there because vB5 isn't good enough and moving to Xenforo would be embarrassing.