Keep in mind that the current version of Windows in 2005 (when it was discontinued) was XP, which has downright terrible resolution independence. (Windows Vista and 7 are actually quite good on this front.)
The upshot of this is... almost all users wouldn't be able to read UI text on this monitor unless you turn it down to 1920x1200... at which point you could get a $600 monitor instead of a $9000 monitor, and get better contrast, better brightness, MUCH better response time, and slightly better viewing angles (newer IPS technology, the T221 uses first-gen IPS technology.)
Besides, if you tried to sell a $9000 monitor in a store, you'd get laughed out of the store.
Oh, and you also needed a highly specialized graphics card to be able to drive it at full refresh rate, although the DG5 was much less picky... still needed something somewhat specialized, though, to get it to work properly. So, they would've had to bundle a graphics card (they did that before when there was absolutely NOTHING on the market that could drive it, though, and bundled a custom Matrox card modified specifically for the T220 and later T221,) and to avoid annoying consumers with a crap 2D-only card, it would've had to have been a top of the line $1500 workstation 3D card.
So, your $9000 monitor which you're taking a loss on is now a $10,500 monitor that you're still taking a loss on. For a monitor that 98% of your customers cannot read without turning down the resolution, and making it instantly inferior to a $600 monitor that works with damn near every graphics card in existence, in every way.
And, IBM makes billions of dollars partially by looking at what's bleeding them dry, and killing it. This is why they sold the PC division - PC customers want cheap, commodity, volume, and when it breaks, buy another one. That's not what IBM does. IBM does horrendously expensive, but it doesn't break, it's extremely well supported, and if it does break, it figures out that it's broken, and calls IBM on its own, and they send a part or a tech before you even notice the failure.
As for the laptop panels... people did see them, and ThinkPads were even occasionally in stores. People didn't care. Laptop technology gets old quickly, so cheap and disposable is the name of the game - why design a laptop to have top-quality parts and last 15 years, when in 2 years, it's going to be completely outdated, and in 3 years, it's going to be slow enough that it's seriously affecting productivity, compared to the latest and greatest? IPS isn't cheap. TN is. If the answer is having your entire company waiting on slow laptops with beautiful IPS screens, and being up to date with cheap TN screens, 10 out of 10 IT managers are going to buy the TN screen. For that matter, 9 out of 10 consumers are going to buy the TN screen - why get a Core i5, 2 gigs of RAM, and a 250 gig drive with an IPS screen, when you can get a Core i7, 4 gigs of RAM, and a 500 gig drive for the same price.
I'm not saying I like it - I hate it. I'm saying that there was an extremely strong business case for shutting IDTech down, to the point that IBM probably would have been acting irresponsibly to their shareholders (their one true boss - the one exception, for a publicly traded company, that I can think of is Google, as they've filed SEC statements specifically saying that they may not do what's best in terms of profit, if it goes against their morals) if they DIDN'T pull out of IDTech.
