Several factors led to the demise of Firefly, but ultimately it was a colossal mistake by Fox executives.
The series was played at an unfavorable time slot, and to confound this, Fox decided to play the episodes out of order, insisting that the 'better' episodes play first. Naturally, this meant there was some confusion on the audience's part.
Former Fox Entertainment president Gail Berman gives a little insight into the decision in this interview she gave to the Pittsburgh Post-Gazette.
At the end of the day though, it was a short-sighted decision that should haunt the Fox executives to this day. It's not the first time they've done this though - look at Family Guy.
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