I've been a long time shopper at Fry's and from a purely "outside" perspective I honestly believe they failed for two main reasons.
1) They tried to do too much. When I think Fry's Electronics I think primarily computers and PC parts, and secondary to that electronics and components. I don't think of refrigerators or washers and dryers, or any of the other complete junk they sell by the registers. You fundamentally can't fill a store with a ton of junk product your customer base doesn't want, and expect it to sell, let alone turn a profit.
2) The upper management allowed things such as for stores to not answer phones, hanging up on customers, and just flat out being dishonest. I only have direct experience with the 4 stores in my Southern California area that I have visited, but they all seem to suffer from the same poor customer service.
I really hope they can somehow pull off a relaunch or find some kind of funding to keep going. I literally would buy decent quantities of electronics components, PC components, and other small things like cable or connectors. Now I'm forced to buy all these things online and wait since there is literally NO where else to buy stuff like this where I am.
Really surprising when you're the ONLY company selling something in a geographic area, yet you can't even get it right.