Because NASA Administrator Dan Goldin didn't like it.
After hearing complaints from employees across the nation, new NASA
Administrator Daniel S. Goldin announced unexpectedly on Friday that
he was changing the agency's logo. Goldin killed the despised "worm,"
which spelled out "NASA" in high-tech red lettering, and restored the
insignia affectionately known as the "meatball."
(Personal note: many employees at the time would have taken issue with the veracity of the claims in this quote - that they "despised" the worm and were clamoring to replace it.)
But he loved that meatball logo. You can see in this picture how much he loved that meatball logo.
PS the aircraft in the picture is the first Boeing 737 ever built, which served as a research aircraft at NASA-Langley for years. It's now in the Museum of Flight, and ironically has a worm on its tail. And that is an air data probe.