The closure notice mentions a server maintenance issue that apparently went awry back at the end of May. That may have been part of the impetus for them to leave, but another (Japanese) article indicates that they only attracted 100,000 members [internet.watch.impress.co.jp] in the 4 years they were in Japan. Despite their incredible popularity in Korea the Cyworld folks haven't had much luck translating this success outside their own country.
SNS is tough in Japan for any non-Japanese company. The most profitable one, GREE, is a paid mobile phone app. The one with the most members, Mixi, is almost a Facebook clone, except it's incredibly anonymous and still invite-only last time I checked.
These are nothing like the graphics rich Cyworld offering. The successful Japanese SNS seem very low tech in comparison.
I know that you've been telling us for years about how the Koreans have pioneered a lot of this SNS technology. It's unfortunate they haven't been able to translate it to a wider audience.