The games IS popular.
Branding as "casual" was not the problem. Both HS and WoW were branded as "casual" in their segments.
Competition. Hots was too late to the scene. In addition, Dota and LoL have their attractive features: Dota is totally free, while LoL has a progress talent tree that can be so addictive. This is partly why classic wow is still popular.
Emphasis on teamwork is against the human nature. By nature, human animals seek domination rather than equality, and thus focus more on self-advancement than teamwork. They won't teamwork unless they have to or forced to. That's why they often go 1v9 to varying degree, not necessarily consciously. You can see it particularly at lower ranks where everyone is a dear leader and super-hero.
Bad matchmaking and ranked system. ELO systems' focus on individual performance while Hots is team-based. Thus the assessment system should be modified to the extent of totally scrapping the ELO elements. Ranked is a mess of all sorts of player level randomly spread over the ranks, which is further exacerbated by rampant abuse of boosting. This is the main reason why the competitive players leave.
Bad client. Outdated, bloated, clunky, laggy, sub-optimal, bad reconnect etc. Inaccessible for huge numbers of players-on-potato who are a big bulk of f2p and moba consumers, like in LoL where huge numbers of SEA players is a good share of their player base. The access was further reduced by ditching 32-bit and dx9. Maybe this is the company's focus on more lucrative segment of the player base, but the result is clear.
Weird priorities logic. Chen nerfs and map mechanic reworks that nobody asks for are put in advance of MM issues that everyone complains about. This probably has something to do with their internal processes where they seek to do things that are easy to report at the end of quarter etc., as opposed to the things that are relevant to the playerbase. A sign that the company is, so to say, mature.
Poor interaction with the e-sport scene and organisations.