Honestly, I think part of why I didn't keep following was the fact that I couldn't keep up with all the handheld generations, not that I could even afford them as a kid if I wanted to. It was really a turnoff for me, even tho I loved the first generation or w/e I was caught up to.
Also I started to grow out of the show I guess, it was shortly after the elemental legendary bird movies I think.
I enjoy playing the newer games but for me Generation 2 (Gold, Silver, and Crystal) was the last addition of "real" Pokemon. Why? Well, look at it this way; the design was so close to Gen 1, the Pokemon still looked original, natural, and in a way plausible. From Gen 3 onwards I still played but I populated my party with Gen 1 and 2 Pokemon as I still do in newer games.
EDIT: Forgot to point out that there were signs of Gen 2 Pokemon being planned when Gen 1 was still new. (Ho-oh in ep. 1 of Pokemon)