The ZIP won out over a superior technology - Imation Superdisk - because it was first to market. Iomega's ZIP disc was proprietary and more expensive per megabyte, while also almost never being bootable. Imation solved those problems with the Superdisk, which could also read 1.44mb floppies in the same drive. However by the time Imation released theirs, Iomega had a huge headstart and few people paid attention.
Later on though Iomega's reliance on their being first to (mass) market ended up killing off their product. They weren't able to hit a cost per mb that was even remotely close to CD-R, let alone USB flash drives - nor could they get anywhere near the speed of USB flash drives. If they had taken the time to innovate further we would probably be talking about new ZIP-related technologies in the 10s of GBs (or larger), instead they are in the dustbin.