If they'd licensed disks at say $1, and the drives at $10, and let other companies build compatible products, it would have lived a lot longer and they may have even influenced the transition to USB thumb drives.
I worked in 2nd level phone support at one time, but had no insight into anything the company did. Aside: the Jazz drive was effectively a detachable internal drive, where the disks came out. A damaged drive could damage the disks, and damaged disks could damage the drive. When an RMA happened, I'd usually do both.
In the end they had some really good engineering, and a lot of missed opportunities.
If they'd never embarked on that ill-fated idea, and instead continue to put all of their wood behind zip drives (and maintaining compatibility), they could've done better. I agree that licensing would've helped a lot. The zip disks were simply too expensive, and they always felt like a proprietary format in a way that 3.5" floppies did not. I was only a teenager at the time but even I was thinking "So wait, this one company is the only manufacturer? Seems niche, not the guaranteed next thing."
In retrospect, it seems really hard to keep iterating on the next proprietary Zip/Jaz drive technology as a single company when your competition is basically everyone else who are collectively working on portable storage with wider adoption rates.