At some point they were reluctant to give any budget to Castlevania. They kept trying to repeat the success of Circle of the Moon by releasing non stop handhelds.
Didn't IGA once say his CV games always got above average budgets or something?
Other than that i agree. Konami simply followed the money from the start, without thinking about the future, and therefore alienated the franchise from mainstream consumers. The early handhelds, like HoD or AoS, CoM, those were still relatively mainstream, because until the PSP came, Nintendo had a monopoly on the handheld market. if you had a handheld, it was a GBA. It was nintendo. With the advent of the PSP though, it suddenly became the "cool" "adult gamer" console, with THREE DEE games. shit like God of War and whatnot, so it was for matuuure gamers, while the GBA and the DS were for "little kids". that mindset that got into the popular gamer culture of nintendo consoles being kiddy consoles with the 360 and PS3 being the mature ones, really hurt castlevania, since all the handhelds mostly stuck to Nintendo, with DxC being the exception. So the handheldvanias sunk lower because of it, alienated even MORE from the common consumer.
like Uzo said also, the PS2 games were nothing ground breaking. And they got piss poor marketing. The one American commercial for lament is pretty nice, but it's just that one, and the Japanese one is totally weird and doesnt do much to sell the game or concept at all.
so since try #2 at Consolevania failed, they once again relegated it to handhelds that noone but fans bought. Especially when they became sequels and prequels.
and then try #3 with Judgement failed and i have NO idea what the target audience was for that or why they thought it would generate any kind of appeal, and we wound up with them deciding to push the financial burden onto an outside team for "fresh perspective", which worked well enough for the first game, but quickly unraveled into a mess that Konami probably should have kept a tighter leash on.
Also Marketing Marketing Marketing. Videogame magazines no longer really exist. you can't just dump a one page ad into a couple and call it a day. you have to use the interweb. release footage to gaming websites, make interviews, commercials, etc.
TLDR seems like mismanagement and very poor foresight.
Not too different from Capcom and Megaman, actually. Only difference being Konami still actually cares about Castlevania as a prized franchise that they want to make work, while Capcom stopped Caring about Mega Man (and most of their franchises) as anything other than a cash cow long ago and just can't be bothered to try and make it work again.