They discontinued it because of legal questions regarding the sale of their product, and I believe they felt it in their best interests to just bow out of the modchip arena.
Personally, I think Wiip v2 would have made a great chip (after v1 sucked so bad... v1 should have never been released, they should have just released v2).
/ I read it on the TCNiSO site awhile back.
// I admin the official OpenWii wiki and we used to support Wiip! hardware officially. Used to. Blah.
/// I'm tired.