Phil Spencer had been saying for years that he'd really like to make a new Killer Instinct, but they needed to find the "right team" and "right opportunity". I can't remember the reason why, but Iron Galaxy was unavailable (either due to desire or other obligations) to continue working on the series.
So, hopefully, this means that MS have gotten Iron Galaxy back on board for another Killer Instinct game. I know some people that would be over the moon if that happens.
Regards,
SB