Don't know much more about the situation than you do, but I doubt it would have had anything to do with the bands status now. They were another band from the 80's that were swept under the carpet during the whole grunge period, plus they lost Sebastian Bach in 1996, so that an instant loss of interest sadly.

However if they made it without Jon's help, it would have probably been too late for them anyway, assuming it would have taken them a few years longer to get a debut album out.