I lived in Adamstown at the time. Not sure why that club didn't work out financially, but I reckon a lot of it was location.
It was not really near the stadium like most leagues clubs, Parra, Cronulla, Dragons, Illawarra, Panthers are ones off the top that are right next door.
Now if it were Wests club near the stadium that would be different. You get the boost of punters coming straight from the game to the club.
Plus, this leagues club was a fairly ordinary venue more like a poor bowling club than a ritzy leagues club.