Performance and tooling.
Unless you go back and actually try to work on era appropriate hardware (or emulators at era appropriate speed), it's hard to appreciate just how good BASIC was for developing software.
Computers were just flat slow.
At the time, my friend and I were trying to write a game, similar to Rogue, on a PDP 11/70 running RSTS. We had already done a BASIC version, but ran out of memory, and so decided to try Pascal instead -- as it had a working memory much larger than BASIC.
We would go in on weekends, and take over 3 terminals in the college computer lab. One terminal was for the editor, as the size of the source code was large enough to where the editor started with the message "Loading file slowly...". It took several minutes to get the editor loaded. So, as a rule, once loaded, we never exited, we simply just repeated saved the file.
The second one was for running and testing the program. The third one was for compiling the program. We were constantly changing and compiling the program. When the compiler finished, we'd clean up our changes, and immediately start it up again, and then start testing the version we had just built. The compile took significant clock time -- several minutes, 10+, of turn around.
At this point, I'll mention how big the file was. The file was about 25K in size. 25,000 characters (50 "blocks") of code, simply took forever to compile and link.
Constrast that to some line changes in BASIC, and typing "RUN". The development cycle in BASIC, back then, was far, far, superior to pretty much anything else. The development environment, being able edit code in place, to STOP the code, PRINT variables, CONTinue execution. Very powerful. In contrast to 10-15 minute turn arounds for "simple" programs. It's well worth the lack of execution performance to be able to write the code at all.
Once, I tried to compile a C program on an Atari 800. The combination of the slow computer, glacial floppy drives, and C -> ASM -> Object -> Executable development cycle made it just simply unusable. 4MHz Z80s running CP/M weren't any better. The drives and CPUs were still slow.
Turbo Pascal was a breakthrough. It's ability to do much of its work in memory, plus the lack of the "link" phase, simply crushed the competing development systems. Now I get compiler runtime performance for almost BASIC development turn around, and a better language to boot.
The IBM PC offered faster CPUs, more memory, faster disk drives (or, even, GASP hard drives). From there, the machines were able to support much better development environments for better languages, and the advantages of BASIC started to no longer outweigh the costs of it. Make no mistake, BASIC's warts are famous for a reason.
But it should also be noted, that while that was happening on the personal computer market, there was a still a very large amount of BASIC development happening in the mini computer market. Alpha Micros, PICK System, BASIC Four. There were several BASICs for different operating systems. BASIC-PLUS on DEC systems was notable as being one of two languages that had first class support for DEC RMS, Record Management System, their database record and index system.
For writing business applications, BASIC was very popular.
And then, of course, there was Visual BASIC, phenomenally successful.
But, simply, as the computers got more capable, the development systems, not just compilers, but debuggers, link editors, etc. become more usable for more people. To the point that the features of interpreted BASIC were no longer as valuable as they once were.