Why was paint-by-numbers so popular? And then not?

Every 5-10 years or so there will be a new "popular craft" which really takes very little artistic ability but still gives good results.  Most of us like to be creative, but do not have outstanding talent.

There's been beading & jewelry making, macrame, string art, decoupage, scrapbooking, plastic canvas, long stitch, and lots & lots of others over the years. 

I love paint by numbers, I find that painting relaxes me.

Because most people can't count and buy it anyway like most of the idiots that is America.

Paint by numbers are still popular, or craft websites wouldn't sell them. 

I agree with macramé. I haven't seen it for a while then it made a come back a few years ago. I remember when I worked at a craft store a few years ago, people were asking for macramé supplies, the store didn't sell them at the time. People are at home more often these days, they have more time for hobbies if they're not working.

I think maybe sewing may be the next one to come back.

There are plenty of hobbies that haven't vanished.  They just aren't as popular as they were:  crocheting, knitting, cross stitch, coloring books, sewing, etc.

My mother taught me to sew when I was thirteen.  It's saved me a lot of money and my clothes FIT.

Tatting, quilling, shrinky dinks, rug hooking,  cross stitch, scrapbooking, plastic canvas, model train sets,  model airplanes, model rockets, puzzles, coin collecting,  rock collecting,  birding, butterfly collecting, etc.

String art. Macramé.  I can tell you something I haven't seen in years: Glitter paint. It came with cardboard pictures with outlines that you could fill in with the different colored pots of glitter that came with the kit. The glitter was in suspension in some kind of clear glue, I think. It was like paint by number, without the numbers.

Dip-it plastic film.

They haven't "vanished." You can still get paint by numbers kits and there are mobile apps where you can digitally paint by numbers. I'm also not sure what you mean by "overnight hits." Paint-by-numbers has been around for decades. 

But okay yeah, some crafts are more popular than others, in different decades. Macrame was popular in the 1970s. Knitting was super popular for awhile in the early 2000s, as was jewelry making. The adult coloring book thing was popular a few years ago. These crafts are still around, though, they never went away completely. 

Adult coloring books are very popular. And if you look on Amazon you will see a lot of large canvas  paint by numbers sets. That sell very well.