Gen 3 took many steps back from gen 2 such as no backwards compatibility and the loss of the day/night system. A lot of players quit after gen 2. Not to say later generations don't have their merits, but I remember being disappointed in gen 3. I wouldn't say pokemon died, but there's a good reason the first two generations are favorites for some.
There WAS a day/night system (in R/S/E at least), it just wasn't a visible one, it was just a clock.
"Many of you feel bad for this lamp...That is because you're crazy. It has no feelings! And the new one is much better." (IKEA's Lamp commercial)