According to some of the gents who used to work on the Transformers team back then, it came down to funding. Hasbro simply no longer wanted to put the money into the development of the fourth season, so "Rebirth" basically become a three episode toy commercial which introduced characters at ridiculous speeds.
Meanwhile in Japan, they did steam ahead with three new Transformers shows:
Headmasters
Directly continued the story of the Transformers from Generation One including Prime, Rodimus, Metroplex and gang. Newer characters that played ar ole were Headmasters, Targetmasters and Sixshot.
Masterforce
Set after the Headmasters series, this was a much more traditional Japanese styled/human based series where most of the Transformers were either controlled by a human (Headmasters) or
looked human (Pretenders). Though directly tied in terms of storyline to Headmasters, it was very different in tone and animation style.
Victory
Set after Masterforce, this was in the future where the two main leaders were Star Saber (leader of the good guys) and Desaurus (leader of the bad guys, his name would later get spelled as Deathsaurus in the US versions of the character). It also introduced new types of Transformers including "Brainmasters" (a modified type of Headmaster) and (no, I'm not kidding) "Breastmasters", Transformers who had small partners that popped out of their chests.
Beyond these three shows, there was one OVA of
Transformers Zone, the first episode of what was intended to be a series focusing on the Transformers Micromasters.
The rest of "Zone" and its follow up series "Mission Combination" were only chronicled in print in Japanese magazines and that's effectively where the "Generation One" series "ended" (though it continued in dribs and drabs here and there, but never in full blown animation like the first series).
If you want to look at "Generation One" as a continuity (albeit with many branches), it did continue loosely in "Beast Wars", which used several elements of G1 lore as its back story. The storyline for the "Binaltech" series of toys in Japan also used "Generation One" as its back story. Though it's long gone, the influence of G1 isn't going anywhere any time soon.
