The Internet was awash with application service providers that would allow consumers and businesses to perform tasks, even in the very early days of the commercial web. After a few years and a burst of the Bubble, most of the companies that provided online services disappeared, leaving only a very few winners. This was true across horizontals, where only a few of the many related companies survived, and verticals, where only a few types of solutions did.
The bloodbath of 2000-2002 took a lot of ideas and concepts with it that were indeed unworkable and unnecessary. Many that survived that storm recall with particular amazement how the wave of ASP (application service provider) dot-coms cratered without leaving a trace. Consumer hosted services, on the other hand, did much better, as did business-to-consumer services. The former is most perfectly epitomized by the stalwart of consumer sites, Yahoo!, while the latter category is best represented by Amazon.com.
A great many dot-coms got busted because of incompetence of the management team, because of poor choices (in hindsight) as to deployment, cost structure, growth plan, because of the sudden drying up of funds (yes, some really good ideas died just because of the general panic). Some dot-coms though died because their business plan didn't work out, despite early hopes.