A long time encyclopedia editor (who worked at Britannica, World Book, and Encarta) told me that door to door encyclopedia sales were dying well before Encarta. Due to the rise in two income couples, which radically narrowed the time window when you could get anyone to give you time at the door...
Btw despite the brief lifespan of the product, Encarta gave Microsoft reasonable return on investment. And arguably more importantly, it helped to quickly entrench the Multimedia PC standard, especially in homes. Which helped reduce Cost Of Goods Sold for all of the company's products, which netted a very nice return in cost savings.
The arrival of good internet search along with the ever increasing pool of web content doomed a curated content approach such as was used by Encarta (which could never aspire to be as broad or deep as the web). I can tell you, based on watching sales figures and talking to many customers, that web search was a much bigger factor for the business than was Wikipedia. In any case it would have been much trickier to get the level of crowd input given to Wikipedia by a for profit enterprise. Regardless of tools or formats used.
I think the phase that usurped Ecarta's position had more to do with good quality web search and to a lesser extent the crowdsourcing model of Wikipedia (run by a foundation rather than a for profit mega corporation) than to content or data standards.