Well, can't really know for sure, though from the outside it didn't really look like there was much innovation outside the addictive game model they first implemented. And then they got into defensive mode buying up competitors / talent, however individual developers can always do things cheaper and create breakaway games that will slowly take from the pie.
Were they in any way connected with kingdom of loathing? If not, then their only innovation was integrating kingdom of loathing with nicer graphics and facebook (i.e. not the game mechanics or business model).
Browser is nothing to do with it. KoL's mechanics are exactly those of Mafia Wars and the like (including both the core concept of "energy" and the business model around it).
