She's a Vachon.
Tough and certified insane, independent-minded yet criminally insecure, and she was the most technical worker which put her leagues ahead of Chyna let alone every other girl.
Luna Vachon's insecurities led to self-medication with drugs which eventually, inevitably, led to her dismissal.
But perhaps most critically, Luna was a gimmick. You couldn't just rewrite her character, she's old-school, and there's not enough honey in the world to smoothen that shot voice Luna developed with her intense promos.
With the E heading for bikinis and mudwrestling, a hardcore chick just didn't fit in. Irony of ironies, one of the edgiest characters didn't fit in the edgiest era of the WWE.