Are you sure about that? In my memory, CD-R and CD-RW didn't exist yet, so your only two options to record digitally were DAT and MD... Why did it die? In my opinion because of bad timing. If they would've waited a couple of years before releasing CD-R and CD-RW it could/would 've been a success. Soundquality was better than MP3. With current formats, you can have digital music files that are as good as CD's, so modern technology is better. But if they'de have further developed it... Imagine that you could save e.g. more hi-res audio files on the MD-disc (Sony, you listening?) than you currently can on your hi-res portable player, and just swap discs...
Anyway, I still have my MD's and I'm not planning to get rid of them! So I hope my MD-player keeps on working!