What/why?

Short answer:
It's dead Jim.

Long answer:
They changed extended setup a few years ago to make it a slightly bigger standard instead. People got pissed and stopped playing.
Then there was Modern, which is basically the closest thing to old extended as we got and new extended disappeared entirely out of view and was discontinued.

sounds incredibly stupid and like they out thought themselves.

Most likely their plan was to always fade out extended because they're goobers.

Extended was doomed from the start. No one liked the change that turned it into big standard, but the truth is, it's popularity had been going down long before that.

The problem is in a large rotating format. In legacy, you can ride the same deck until one of its main components gets banned. Sure, the format evolves and decks fall out of tier 1, but if you have a pet deck, you can keep playing it as much as you want, or just keep the shell and refresh the deck for the meta.

In standard, the meta shifts very rapidly so people don't get attached to decks as much. Every new set shakes up the meta and you need to start anew every year.

Extended though was a harsh mistress. You'd work and adapt your deck for 3 years. You'd see your deck go from its youth when only a few blocks are legal, grow with each release and reach adulthood 3 years later. Tben boom! Rotation. Half your deck is no longer legal. You spent three years working on it just to watch it get beheaded by the rotation. And now they expect you to do it again?

Post rotation extended was barren. People only played it because they had to. No one liked it. It wasn't so much the meta that was bad. It was just that memory of what it used to be that ruined it for everyone. "Remember the old extended?" was on everyone's lips.

This is what wotc tried to fix with yearly rotations. That didn't really work though. You would still carry one deck for years, then have one of its major components rotate. All it did was stagger the disappointment so that a few people would be frustrated each year rather than everyone all at once every 3 years.

In a last ditch effort, they hoped that by making it smaller, they could get the same effect as they had with standard. We'll never know if that would have solved the problem because that version of extended had a slew of other problems, one of them being that it bore the name of a once great format, but no longer had anything to do with it.

Wotc learned. Big rotating formats don't work. Hence modern.

Still... remember the old extended?

I remember ALL the old Extendeds. Remember when it first came out? They called it Type 1.X! And they had that rule where the OG Duallands were legal even though no sets they were in were. Fun days.

I really don't see how that's any different than standard.

This whole "getting attached" thing doesn't seem how it would work in reality.

I heard it became sort of an eternal format when they changed how set rotation worked so everyone got bored and just played modern instead

Standard rotates every year and because of the smaller pool, the meta changes a lot more with each set. There isn't as much time to become attached to a deck.

Extended rotated every 3 years. That's a pretty long time. Also, due to the larger pool, the meta shifted a lot more gradually.

The attachment problem didn't affect everyone, but I can assure you that the popularity of extended dropped significantly after each rotation.