Sad, but not really that unexpected.
Probably a case of many areas coming together to making the situation untenable, including :
Raw materials cost increases for the obvious, well publicised, reasons
Being based in the state with the highest tax, minimum wage & energy costs in the US
The age of the management – AFAIK the people listed as owners were original employees from when Joe Martin owned the company & moved it to an employee-owned trust.
I disagree with Hollowpoint WRT affordability – Sherline machines were always quite pricey (particularly in the UK) for what they offered. Current price on MillHill Supplies website for a basic model 4000 short bed lathe is £936 – add a 3 jaw chuck & drill chuck “package” and that rises to over £1100 – for a 3.5″ swing x 8″ BC lathe. A basic model 5000 mill is nearly £1100. Not clear from the site if that is exclusive or inclusive of Vat, but you have really got to want one for that kind of money.
I had a deluxe long bed lathe + a lot of accessories bought used for some years. Had fun using it, but after it sat unused for quite a while I moved it on – with some difficulty. Not much interest at all. What initially attracted me to the “system” was the large amount of well written, illustrated & presented documentation & it is welcome that they have stated the intention to keep this available.