The prevailing attitudes among Americans at the time was not condusive the success of a car like this. Even amid high gas prices the demand for "gas guzzlers" is still fairly high. For example, Chevrelet has yet to release the Optra in America despite the high prices. The reasons Matt mentioned are also significant factors as to why GM may have canceled the EV1.

I have heard decent things about the prospects for electrical veichles but there are still major obsticals that need to be overcome to make them commercially viable.