Lan cafes were all the rage when LAN was easier then playing on the internet.
There was an age when internet wasn't an immediate option for players, there were very few dedicated online gaming services. High-speed internet was a LOL, dial-up was the norm back then. Battle.net was a bit of a pipedream, and even in the age I'm talking of, it was only available for Diablo. Warcraft 2 didn't even have internet support built into it. Quake had TCP/IP, but it was largely for Peer-to-Peer. Gamespy hijacked Quake (and other games)'s TCP/IP settings and allowed you to search for servers, but it was very clunky, and didn't offer any support other then finding games.
LAN cafes were worth money back there - bypassing all of those issues entirely, as the LAN/IPX model didn't have to fuss around with those issues - the systems were setup to capitalize on LAN's positives. You could shell out a few bucks, and play a game of Warcraft 2 or Quake with other people in the same room - you could talk to them. Teamspeak and Ventrillo weren't available back then so talking to people became a matter of setting up calls, or visiting lans.
Fast Forward to today - Everyone and their dog has a high-speed internet connection. They get to play with their own system, tweak their preferences, play with however powerful a system they can afford. Teamspeak and Ventrillo is everywhere, you no longer need to jump through hoops to adequately communicate on the fly. And probably most importantly - the games all have full internet play built right into them - you don't need to use Gamespy to find games anymore, the game will feed you a list of available servers if you ask it to.
Then there is the superfluous nature of console online games, which stole more people who would have gone to lans.
Really, it was eventually doomed to failure, just because the nature of the technology we were using was evolving.