I have experience with evaluating legacy products and obsoleting products. It is usually a bigger undertaking then one would think. To your point, it is very important that companies continuously evaluate the portfolio of the products to see what is driving sales versus what is declining in sales. Through my experience there are 3 challenging aspects of obsoleting a product:
1. Value of removing a product off the market and the effects it has on base business needs. The company I worked for spent a large chunk of time determining if it made sense to remove a product that was basically declining in sales (X) but was an optional support for another product (Y). Product Y was doing very well in terms of sales but product X wasn't keeping up. However, our largest customer continued to want and buy product X along with product Y. Therefore, this type of scenario can cause some type of disagreement as to how to move forward and in a large company these type of decisions can take forever to decide.
2. Inventory. If you obsolete a product what happens to all the excess inventory you have sitting in distribution centers. The last thing you want to do is scrap all the product and take a loss on it. Therefore, the supply chain planning of handling the current inventory is challenging.
3. Updating ERP Systems. When a product becomes obsolete you have to ensure that your ERP System is aligned and that the BOM, documents, and any other material or components that belong to the product and portfolio are obsolete as well. Getting all systems aligned is necessary. In addition, the communication to everyone involved and letting them know! Again, this a planning challenge as well.

If the company is high in the tech arena, then their products can out date in relatively short amount of period. Sometimes, components for older products need to comply with new standards or requirements. If the sales for that product is already decreasing, then the company may not invest more time, money and man hours on updating the necessary compliance requirements on them. Even natural disasters can have a huge impact. In some places, it has destroyed manufacturing plants and slowed production. Post that, it makes procurement very difficult for legacy products. Also, another example could be the supplier going out of business and no other supplier is available who makes a suitable component. In such cases, a product can be considered for obsolescence. This way a company can streamline its manufacturing operations.

My first project as a Biomedical Engineer was to obsolete a product line that was sold to Japan. Based off marketing’s decision the cost to produce the product did not match the profit compared to other product lines that the company was manufacturing. Due to the obsoletion of the product from the market, I was responsible for transitioning all associated quality system documentation from an issued to closed obsolete state within our database. Any existing product within the warehouse and vendor had to be scrapped and accounted for. In the long run, this decision increased our profit because instead of spending money to produce this product we developed advances to another product line which increased our sales

I have had experience with obsoleting product in my company that had been cumbersome to carry as a product. These were product that had not been making the amount of money that was worth the cost of production. The undertaking was a long process, as the product had many accompanying documentation and there was existing stock in the warehouse and on the market. The existing stock would be sold as is but after this was gone there would be no further production. Once all the records were closed out the product was officially obsoleted, and it was a wise decision in the long run.

There are three primary types of obsolescence: technical obsolescence (new technology surpasses the existing technology), functional obsolescence (when a technology can no longer be fixed//upgraded due to parts or software compatibility) and planned obsolescence (a business strategy used to increase sales).
Others have mentioned about the lengthy process for obsoleting products. It's also troublesome for customers if a product is suddenly not on the market anymore.
To lessen the impact of a sudden replacement of a technology due to obsolescence, companies should focus on organizing the life cycle of the equipment before it is in clinical use and even before it is purchased For example: incorporating the working life expectancy and the time frame in which the equipment will be replaced/renewed into the business plan during the budget process.

Obsolescence of a product is important and plays a major role when product is no longer as popular or successful anymore. The company is wasting their resources and time creating more of these products, when they are not selling at the rate they were initially at release, or sometimes not even selling at all. As others have mentioned as well, when products are suddenly removed from the market, this may cause a stir among the customers. The disappearance of the product may not be expected by the customers, and the demand may come back. If this occurs, after the product is removed, the company can work to improve it and relaunch it in the market. With the technological advancements being done, it is very common now for many products being obsolete because they cannot keep up with the market.