NOx emissions were actually NOT a problem for the gen. 1 Insight. 2 catalytic converters, one specifically designed to store/process NOX meant the lean-burn car was rated ULEV (Ultra-Low Emissions Vehicle)
by CARB, with 50% lower emissions than an average new car (ie. non-lean burn). Independent dyno testing supposedly found no NOx in the Insight's exhaust. (Source)
(This *was* a problem for the older, lean-burn Civic VX, which didn't have a NOx catalyst, so wasn't sold in Cali.)
So if it's not NOx itself, maybe the additional cost of emissions control to deal with the issue is one reason. The NOx cat was a ~$1200 (retail) part.
Another major reason it may be gone could be driveability issues/consumer acceptance. In my Insight, there was a noticeable change in engine character when lean burn engaged: throttle response deadened, power output as a function of throttle position changed noticeably.
My car also had a very slight (but noticeable if you're attuned to the car) "stumble" when transitioning into lean burn. And then again when going in & out of periodic NOx purge events (about every minute or 2 cruising at 80 km/h / 50 mph).
The Insight's EGR system (which also helped regulate NOx, and was possibly active much more than on non-lean burn cars) tended to gum up over time, causing even more driveability issues.
I could see these things bothering lots of drivers.
Also, it required an a lot of care/attention to take advantage of lean burn to truly maximize its benefit, something most drivers wouldn't bother with. (IE. finessing the throttle to hold lean burn as much as possible as power demands change.)
The cost/benefit balance for the average driver probably doesn't work out.