the diamond drives were twice as expensive, if not more than that, as a chaincase setup, more complex and required more precise service. Clutching is different on DD machines because of the gearcase principle used (you spin a gear, that spins a set of planetary gears, that spin an output gear that spins your drive shaft.) There are just more variables to account for with the gearcase. There were probably more gear selections with a DD, but they're expensive units to modify, not to mention considerably more work to make changes to.
A chaincase is just a more direct way of transfering power. Its like electricity, the more points of resistance to power, the more power you will lose before it gets to where you want it. So a top gear connected to a bottom gear via chain SHOULD transfer power a little more efficiently to your driveshaft. Its also a heck of a lot easier to pop a case cover off and change out gears than it is to remove the diamond drive. Its simpler, quicker, and cheaper. Chains are prone to breaking under heavy load or when on-the-throttle landings occur, but the diamond drive was certainly not indestructable by any means either......
I believe going back to the chaincase will help boost the aftermarket clutching world. Its much easier to work with and the principles are already well known throughout the entire snowmobiling community, so that might draw some old cat customers back who maybe strayed away from Diamond Drive equipped sleds because they were skeptical about working on a gearcase in a snowmobile.....
sorry for the long post, by the way