The problem with the Victory brand was that it suffered from some bad marketing choices. It tried to sell progressive design to the cruiser market, who largely chose tradition as its highest priority. The Indian brand serves that function for Polaris. Project 156 was supposed to promise the American Sport Bike. At best the concept was a power cruiser, to compete with what, the V-Max? At worst, it was the Octane. And the Brammo Empulse targeting the smallest market of all.
The cruiser market is aging, but to say that all sport bike riders will eventually migrate to cruisers is to ignore the obvious. The rise of the adventure market is not just for style, it is responds to a desire for comfortable long distance rides that don't weigh in at 700 lbs +++. That market is broadening to meet the greater range of rider interest. From bikes like the MT/FJ-07m MT/FJ-09 Versys 650 & 1000 & Multistrada 950 serving the desire for reasonably priced tall sport tourers to the Africa Twin expanding the off road side, the adventure market is expanding and offering a wide variety of choice for the aging sport bike rider. Don't forget about the growth of naked, retro-naked and scrambler bikes. Even sport touring is seeing a mild resurgence with the success of the Z1000SX/Ninja 1000 (top selling bike in Europe), and the introduction of the GSX-S1000F, Super Duke GT and the Ducati Supersport.
All of these are viable alternatives to cruisers for aging sport bike riders who prefer not to ride in the gynecological position and have no desire to join the a$$less chaps and fringes fashion set. So Polaris wisely (from a business perspective) chose to focus on their traditional cruiser and abandon the Victory identity search. I feel bad for those who bought into the Victory look, because personally I like it much more than the traditional cruiser. But then again, I'm in my mid 50s and never see myself owning a cruiser. Why should I when there are so many other choices that actually fun to ride.