Radio Shack discontinued production, and I always suspected that the FCC had ‘slapped their hand’ for cleverly getting around the “permanently attached“ rule to enable rooftop mounting of the antenna.
Unlikely. The FCC would have granted the type acceptance for that, so they were well aware of it. It met all the FCC rules, and was perfectly legal.
Like I've said earlier, consumers are more interested in small/cute radios than something that actually works. Antenna size is a big factor in the consumer world, even for many hobbyists. Just search though this site for the number of people that want:
No external antennas on their car, but want to hear lots of radio traffic.
CB'ers that don't want some "huge antenna on their car", but want it to work well.
Hams that are afraid to install an external antenna.
No, these radios failed not because they didn't work or because the FCC didn't like them. They failed because most consumer have no understanding of how radios work and how important antenna are.