Many developers left the company, no map improvements planned for iOS 8 release were finished in time. Mostly it was failure of project managers and engineering project managers, tasks were very badly planned, developers had to switch multiple times from project to project.
Another source corroborated much of what was said by the first tipster.
I would say that planning, project management and internal politics issues were a much more significant contributor to the failure to complete projects than developers leaving the group.
There is still a chance that Apple could introduce the enhanced mapping features in iOS 8.1, or perhaps even in a later iOS 8.0 Beta. The company's many hires in the mapping area shows its serious about improving its product, but only time will tell when that will be.
Apple introduced its Maps application with the release of iOS 6. It was met with a lot of criticism over lack of mapping data and POI locations and even caused Apple CEO Tim Cook to issue an open letter regarding the application.