I wouldn't say it flopped. I would just say while conceptually it was great, and I'm all for agency and freedom to modders/content creators, there is a reason why there wasn't many great modules for it, and still aren't. There is a vast asymmetry between what somebody can create in their basement, utilizing friends for voices, with a shoestring budget, and little or no development resources (both money and tools - yes everybody who got NWN got a Toolset, at least if they were on PC, anyway, but I'm talking about additional tools). The only modules for NWN that I really liked that didn't come from Bioware (NWN1's OCs and premium modules) and Obsidian (NWN2's OCs) were made by studios. Like Mysteries of Westgate, for NWN2, from Ossian Studios.
I love it when fans/modders/custom content creators seek to add stuff to the existing content from "official" developers. I've often seen very great results when they add whole new areas and quests to the map, new NPCs with their own NPC quests, new items/weapons/armor, etc., even new classes and races. There the results are often interesting, and effective. But it can be hard for them to do what official developers do from scratch. They just don't have the budgets, tools, resources, huge teams subdivided into sub teams working on different areas of development.
I never played any NWN module that really "wowed" me any more than the "home-brew" dungeons I (or other people who took their turn at DM in our group) used to make for D & D back in the Upper Paleolithic. Making them was fun. I layed them out on graph paper, decided where the pit traps and secret doors were, ... etc. I mean, I had to be honest, the stuff TSR "officially" released as modules was always better and more interesting. And we liked playing them better than our own efforts at doing the same thing.
The second thing is, while it's really cool to try and replicate the tabletop experience on a computer the way NWN tries to, it's sometimes harder to get together all your friends with interest, time, and energy "virtually" to "play" a module or dungeon together cooperatively than it is to do in real life, maybe especially when as you get older you have fewer and fewer such friends. NWN2 dabbled into putting in some online match-making tools to link you up with other players, but I never found them all that great.
What I like about the MMOs is it's now zero-effort to get into cooperative play (albeit admittedly often with strangers esp. if you're not in a guild); the built in matchmaking tools in WoW are pretty good AFA linking you up with 2 other people for a scenario, or 4 other people for a dungeon, or maybe even 20+ people for a raid, now, too. Even still I don't do it - much - and pretty much avoid the PvP stuff; it holds no interest for me.
I must confess, what I like about SRPGs is I never have to wonder - who's going to drop out of the group because of connection issues, or computer crashes, or mom is telling them to make up their room, or they forgot they have to leave in a half hour, etc, etc, etc. I'm not entirely antisocial but as with all things in life, the larger the group of player playing simultaneously, the sooner one will face some issue of some kind, and there goes your effort at finishing your MP campaign. When I play a single player game, it is always at my pace, in the chunks I prefer (some times a long stretch, some times a short), where and when I want to without accommodating anybody else's schedule, in the order I prefer, and I just don't have to worry about anything affecting any other players but me. 
Oh, and plus, if I forgot I have to be somewhere in a half hour, there's nobody else in the MP group yelling at me for dropping out early. 
In many ways, NWN2 really hit my sweet spot with Storm of Zehir, as I've said. 3.5e rules done right, finally I can control a party of six characters (with all the interesting/rich options 3.5e classing/prestige classing allows) in a well-designed "official" module/campaign, it was great stuff. It's just too bad nobody ever made an epic (21-30) level module/campaign on that same foundation. I know some people hate the epic levels, but that's personally when I think characters get the most interesting (in terms of having a wide range of abilities). A follow-on to SoZ with epic level content as I've said a few times I would probably still be playing now.