He refused to distance himself from being HBK 2.0. In shoots there are quotes about HBK telling him he needs to put a stamp of his own on it but just seemed to be content being a tribute act and a lot of his get up and moves show that. If part of that is on creative, then blame them too, but I doubt Vince is in the "Give up on blonde quality workers with the look" business, something more or his own lack of ambition or something played into this. He's a quality worker and the victim of a face turn getting pop then gradually fizzling.
Once you turn someone like that face they/you need to up their game or they will just turn into a parody of the whole thing. There was a news item last year that he is done with the WWE soon, so don't expect much.
Should have made him back into a heel early last year, he's a face they A. don't know what to do with in this era and B. make people go "Oh nice Shawn tights, nice Shawn Kick".