My take on the Zip was that it was never supposed to succeed. It was Doug Donnelly's middle finger to the single action world for their loyalty to Colt. USFA never could sell their all USA-made single actions for enough to make a profit, because he could never charge as much or more than Colt. Though most conceded that USFA's were very high quality guns, and many believed them to be much better built than Colts (myself now included), the popular opinion was still something like, "Why pay that much for a premium USFA copy when, for just a couple hundred more, I could get the real thing?"
Colt was producing fairly decent SAA's by then and were making enough of them to be encountered online at major distributors. I remember ordering one through Bud's in 2010 (I don't think we'll ever see a new one at Bud's again). That was a year before USFA ceased production of single actions. I got a really good deal on that Colt. I think I paid maybe $1,000 for it, and I counted myself lucky to have acquired a "gen-u-wine" Colt Single Action Army for close to what a new USFA premium cost. I'd have been better off with the USFA. Even my Rodeos are better built than that Colt was. But I, too, in my naivete, preferred the pony back then.
So Doug shut down the single actions and instead produced the crappiest .22 pistol ever made, appropriately named the Zip--as in Zilch, Nada, Nothing. I always imagined him thinking, "If price is all they care about, then THIS is what that sort of money buys you!"
I never met Doug Donnelly. Perhaps he was just a wealthy man who got bored with his hobby. But I could understand if he was thinking precisely what I laid out. Ironically, probably the people who felt screwed the most by their purchases were the ones who bought a ZIP based on nothing more than brand loyalty to USFA.