“The challenge for us was that it felt that the biggest lesson Nintendo learned from Mario was to hold onto their rights even tighter, limiting collaboration when it came to translating Metroid to the big screen. Our entire development time was spent exploring the Metroid world, and what we could – and couldn't – do within it.” - former president and co-founder of Tiger Hill, Brad Foxhoven

This fact, coupled with a lack of backstory in the Metroid universe (at that time), lead to the project being killed off in 2007. Nintendo simply needed to flesh out Metroid a bit more to make a movie out of the brand. They were being asked questions about the Metroid universe that didn't have answers yet. Perhaps the decision to kill off the movie was for the best.