My guess, and my opinion here only, would be Leviton made the purchase so they could make money. HAI was already on it's way out with what it had and was simply way behind the times long before Leviton made the buy.
As to the decline in development- I think the problem was more that the techware was already very dated and no one at Leviton had the talent to develop "reliable" new - case in point - the Leviton Email Notifier which does not support modern email standards, the Omnitouch 7 when it was first released had fewer features than the discontinued touchscreens it was replacing.
Leviton's new child, Bitwise, unfortunately does NOT support many of the Omni-features when integrating the OT7 (into Bitwise), which means you have to run at least one OT7 Omni and one OT7 Bitwise to use both sets of features (again if you choose to integrate the Omni with the Bitwise). Oddly, Bitwise supports newer email security standards but lack support for straight SMTP, so has no backward compatibility, which makes no sense if you have to use two different email services -- one for Omni and one for Bitwise. Seems like the Product Managers for both lines should be fired and they should go blazing forward with a fully integrated platform adding competitive functionality that is popular. Of course, they may simply not want the business!