Upvote:5
Low cost airlines are what killed the ferry. Nowadays you can buy a round trip ticket from mainland Europe to Iceland for as little as 100 euros, so the vast majority of people would rather save time and money by flying and renting a car. And if you don't have a car taking the ferry is even less attractive.
Cheap airlines are also the reason why night trains are disappearing and routes such as the London to Istanbul train have long become a tourist attraction rather than a practical mode of travel (unless you're the guy from Seat61). And they're also why you no longer see boats full of immigrants landing in New York from Europe - nowadays you just take a relatively short flight :)