Too Many Bluetooth Chips, Not Enough Applications
"VCs investing in the Bluetooth space are focusing on semiconductor technology because of perceived higher margins, DVG said. However, chip prices could plummet "without serious growth in those applications that ultimately will drive longer-term demand for Bluetooth chips.""

As in other markets, people think of infrastructure as disconnected from end-user demand. While it's true that addressing widespread needs across a whole industry might somewhat protect investors from market fluctuations, building toll highways that nobody wants to drive on still doesn't look like a viable business model. Someone has to fund applications or Bluetooth (or WAP and optical components for that matter) won't find enough usage to justify the huge investments they've been getting.