To start off, the Office of Technology Assessment is still authorized to exist, but its appropriations were cut off. In other words, were Congress to appropriate money for OTA, it would not need additional authorization.
OTA was defunded for a number of reasons. According to Jathan Sadowski, in 1980 the book "Fat City: How Washington Wastes Your Taxes" argued OTA was redundant, although it may have just as much to do with attacking the sacred cows of the future Republican majority.
In the mid-80s OTA criticized the Strategic Defense Initiative. It also had made disfavorable comments about supply-side economics.
When Newt Gingrich swept into power in the mid-90s, OTA was placed on the chopping block. The Republican Contract with America included calling for cuts to committee staff by 1/3, the number of committees, and that zeal also included legislative support agencies. As you can see by my analysis, all the support agencies suffered a particularly large hit when the Republicans came to power.
One goal was cost savings, although the OTA's cost was so minuscule as be largely irrelevant. It also allowed the claim to be made that a legislative branch agency had been eliminated. The claim was also made--see these remarks by the Chair of the House's Legislative Branch Appropriations Subcommittee- that OTA was redundant. The goal is to "downsize" government, makes it do more with less. The claim was again made in 1996 that Congress must first cut its own budget before cutting elsewhere, and it did so in cutting OTA.
Some Senate democrats, notably Harry Reid, were not willing to fight the House on OTA despite the impassioned pleas of colleagues, saying Mr. President, the Office of Technology Assessment is a luxury. It is something that would be nice to have if we had lots of money like we used to have. But we do not have the money that we used to have, and we have to look someplace to make cuts....The work the OTA does can be done by other agencies....All we can have is the General Accounting Office and all we can have is the Congressional Research Service, which the congressional staff depends on around here to meet the requests of constituents at home and Members of the Senate. Our staffs depend on the Congressional Research Service. They did not depend on the Office of Technology Assessment."
Many argue (disclosure: including me) that OTA fulfilled a unique role distinct from that played by other agencies.
There are efforts afoot to revive OTA. Former Congressman Rush Holt perennially introduced legislation or offered amendments to restore OTA along its original lines. The President's Review Group on Intelligence and Communications Technology called for its reinstatement, but in the Executive Branch. Currently, the Senate has directed GAO to play a larger technology assessment role. GAO is ordered to:
" Technology Assessment.--The Committee recognizes the need for independent, balanced, and authoritative science and technology assessment analysis for Congress on a diverse range of policy issues. The Committee commends the GAO for providing technology assessment advice to Congress over the past decade, but acknowledges that the scale and scope of that work has been limited due to budget constraints. The Committee recommends an increase to the GAO's request (as adjusted for updated technical assumptions) to enhance the GAO's technology assessment capabilities in fiscal year 2015.
The Committee directs the GAO, within 60 days of enactment, to submit a strategic plan for its technology assessment program. The strategic plan should include proposed solutions to critical challenges constraining the GAO's technology assessment capabilities, approaches to increase responsiveness to congressional needs and priorities, strategies to improve technology assessment procedures and methodologies, and additional authorities and resources that may be necessary to best carry out this mission."
Full disclosure: I work on these issues in a professional, advocacy capacity.