To be fair, for 2006/7 that worked pretty well.
The Mike Pattern/Melvins is the first one I remember as being proper empty. We got upgraded to a bigger chalet and got given some extra (free) wristbands. Some pals came down from London on the Saturday and took those.
As others have said, the expansion to the US, Australia etc was just… poorly timed, given the whole global economic downturn that hit their core market pretty hard. I think that was really what did for them - people just didn’t have £400 four times a year to blow on getting trashed with their mates in a chalet by the sea.
It’s interesting looking back, eg 2009, which was the first year to have four festivals. Vs the Fans 2 I remember being busy, Breeders less so. The two at Christmas were mad and totally sold out. But after that it was so up-and-down.
(remember everyone complaining about the 10 Years One being announced only after MBV selling out? imagine that still being the worst complaint about ATP)
I think they just hit a wall. Left-of-field curators like Groening sold poorly, obvious ones like Pavement didn’t but got criticised for being predictable. You can see why they tried to shake it up with stuff abroad or I’ll Be Your Mirror, it just didn’t work and all seemed to spiral out of control from then on.