Commodore kept selling the 64C until it entered chapter 11 in 1994, actually. It was the 128 that was an embarassing dead end, but the 64 had a huge base of software and there was still a market for a dirt cheap TV-connected home device for all the purposes for which it was ever useful.

It's hard to remember how fast things changed in the early era of computing. The killer app that finally put the knife in the 8 bit home computer was... the web browser.