If you haven't seen it already, I'd recommend the Spectacular Legacy of the AWA DVD that was released by WWE in 2006. Goes into good detail about the AWA's history and demise.
 
Basically, it was a combination of everything: WWF's expansion + talent raid, AWA going into untested markets before taking care of "home", Verne's "old school" mentality (wrestling before "entertainment") and reluctance to compromise the product, etc. Long story short, Vince had his finger on the pulse of the business and what most fans wanted while all of the other promoters, even if they had the resources, didn't.  
 
The beginning of the end for the AWA more or less came after SuperClash III when Verne screwed over Lawler and everybody else by not paying them. It ended for good when the State of Minnesota decided to enforce an eminent domain claim on some property Verne owned in Lake Minnetonka, which he was borrowing off of to keep the AWA afloat. That was the final nail in the coffin for them as an "active" promotion and the remaining talent went elsewhere, although they did manage to put on a few spot shows under the AWA name here and there for another couple of years until it disappeared entirely.  
 
In 1996, Dale Gagner, a self-proclaimed "distant relative" of Verne who used to work with him as a promoter, claimed to have acquired the rights in bankruptcy court and revived it. A few years ago he decided to model it after the NWA by establishing a territory system where he'd lease out the name to promoters in different areas for an annual fee. After WWE acquired the tape library and trademarks from Verne, they made legal threats toward Gagner and accused him of trademark infringement. The real Gagnes also accused Dale of once promoting an "AWA" show without their authorization when he was still with them. This along with Gagner doing bad business with his AWA "members" (translation: him not keeping his promises) led to many of the promoters abandoning him. Of course, Dale's story is that he took a look at the structure of the organization and kicked out certain promotions who supposedly didn't meet the standards of what he felt the AWA should be, but everybody else who was involved says different.

Now if you guys goto the realawa.com  . There is Brian Logan with the AWA World Title and him shooting on Dale Gagner , Steve Corino, Ricky Landell and others. The  shoot sound like something like this was going to happened.

Maybe it's just me, but the AWA match style never seemed to progress from the 60's (Crusher and Bruiser era).  Very slow paced, and the booking of finishes at least toward the end was terrible. It always seemed like the AWA got lost in the past and refused to evolve, until it was too late.  Also, during squash matches, why do the jobbers get so much offense in?  Whoever heard of a 12-15 minute squash?  Just my $0.02.

Some of their matches were really good.  Towards the end though is where it dropped off.  The Team Challenge Series is one.  The empty stadium shows were another.  I saw a few of those when I was a kid and even then thought they sucked.  I'd probably feel even worse about them now.
 
The pacing was really slow and reminiscent of the real old school 60s/70s style matches.  But if you looked at their audience back then at the shows you'll understand why they kept it that way.  Unfortunately for them that is why they died in the end.  They kept it all old school and the younger audience didn't want to see that.