Co-founder Todd Agulnick goes through the story of the service on that blog post. It was originally developed as Foxmarks, and it was designed to work directly with the Firefox browser to sync bookmarks there. Eventually, they brought in large numbers of users with tons of bookmarks in their browsers, but the company struggled to try and find a way to make money off of those numbers. Search became a main target, and if you're an Xmarks user, you'll know the 'tags" that would appear on Google Search pages in the browsers.
But despite initial interest, that never took off, and after unsuccessfully finding a buyer for the company this past spring, Agulnick says the end has come. Fortunately, there are bookmark syncing alternatives, and most of the browsers these days have options built-in (which is why Xmarks won't move to a subscription service -- hard to sell something most browsers are offering for free). But I'll pour some out for Xmarks -- it was an excellent service. I'm just sorry it couldn't find a profitable place to settle down.