Think there were loco-hauled commuter services some way up the ECML until the mid-70s (using a now freight-only chord between Canonbury and Finsbury Park).
Why did it close? A combination of factors: a sense that rail travel was permanently on the downturn; the income to be made by redeveloping the site as the Broadgate Centre; the fact that the station itself was in a fairly shabby condition and would have required major maintenance soon; and the fact that the services using it in the last years (I think a train every 20 minutes Richmond - Willesden Junction High Level- Gospel Oak - Camden Road - Highbury & Islington - Broad Street: and occasional rush hour services Watford Junction - Willesden Junction Low Level - Primrose Hill - Camden Road - Highbury & Islington - Broad Street) were hardly essential commuter routes that had no viable alternatives. Closing the line also allowed services to the developing Docklands areas (on the North Woolwich line) - as well as to the recently reopened stations at Homerton, Hackney Central and Hackney Wick to be improved and increased in frequency.
(The Watford services for a time were diverted via the newly-constructed Graham Road curve at Hackney to Liverpool Street - but this added so much to the journey time that they did not last very much longer)