Love it or hate it, but UT2K4 had an original soundtrack that went well with the general feel of the game. Big pompous maps, big pompous orchestral music. UT3's sountrack consists mostly of remixed UT99 tracks, iirc. Basically that's the main problem: UT2K4 was proudly its own game while still being recognizable as a 'UT', while UT3 is an uninspired, sloppily made UT99 wannabe.
Well it doesn't look like there'll be another UT anytime soon, if ever, and this is largely due to UT3's (relatively) poor reception and sales. Had it been a better, more successful game, we'd almost certainly have an UT3.5/4 by now. So yeah, technically it did kill the franchise, though it looks like Epic may have lost interest long before its release, which made its failure more or less inevitable.
Yeah, but thanks to Epic's incompetence and indifference, that's all it'll ever be.