Very likely the case.
There was a lack of advertising, the £1 fares were practically non-existent after a few weeks (and not due to selling out because some services didn't have any bookings on them so didn't run) and he added two towns to the calling points because people gave them a good case for stopping in their towns. I can't see National Express or Megabus doing that just because people tell them the demand might be there.
I remember that there was some debate about whether the company was genuine at the start, as evidenced by some posts at the beginning of this thread. That can't have helped, but essentially I think there just wasn't the custom to make the business viable.