Matewis: Only played it briefly several years ago and it seemed like an upgrade on all fronts of the UT experience. Looked amazing and played amazing too from what I can remember so I'm not sure why it never caught on. Might've been at the start of the whole military shooter multiplayer revolution.
It never caught on because Epic and Midway screwed up monumentally.
Unreal Tournament was always a PC centric series. However, UT3 was developed for consoles, adjusted for consoles, balanced for consoles, and then ported to PC. And at launch, it showed. It was obvious to the PC players that what they had to deal with was a poorly ported console game.
An example: The flak cannon has always had two firing modes. The secondary firing mode launches a flak grenade at your target. This is a ballistic firing mode, and as it's a heavy grenade, you have to aim upwards to get any sort of distance on it. And of course, you need to adjust that upwards aim in order to control precisely how far it goes. With a mouse, this is easy and feels very natural. With a controller it's impossible to do with any precision as fast as you need to within the game. So what did Epic do? They changed the secondary firing mode so the flak grenade is not launched out of the end of the barrel of the weapon, but is instead launched mysteriously and magically up through the top of the barrel at roughly a 30 degree angle, because then the poor console players wouldn't have to aim upwards to shoot it. Of course, this meant that it was now impossible to aim it, because the angle of the barrel and the angle of the grenade's trajectory were now offset by 30 degrees.
This was eventually patched out of the PC version, but at launch, these were the kinds of things we had to deal with: changes made to the game specifically to accomodate consoles, and then ported straight over to PC. Over time, Epic did do a grand job of fixing these, making the PC version an actual PC version rather than a lazy port of the console version.
But the very worst mistake they made was to completely fail to understand their existing community. They already had a large and thriving community of UT2004 players, that they were hoping would make the transition to UT3. Tons of people were hosting UT2004 servers, and tons of people played on them. However, the vast majority of these were hosted on Linux servers. Did Epic have a UT3 Linux server ready for launch? No, they did not. 2 months later, still no Linux server. 4 months later, still no Linux server. I believe it took over 8 months before they released a Linux server for UT3, at which point it was too late. People had given up on the game and either gone back to UT2004 or moved on to something else.