Basically massive amounts of state repression. With a side of a shift in the understanding of revolutionary praxis.

During the Great War, Tsarist Russia was overthrown by the workers and peasants of Russia. Widely considered to be the most despotic country in Europe (although the Europe"ness" of the eastern Slavic states can be debated, that argument is bizarre and this is not the place) and the popular revolution became led by the Bolshevik faction of the Russian Social Democratic Party, who moved the revolution in a state-capitalist direction.

This caused the world to collectively (what we historians call) lose its shit. Soviet Russia dropped out of the deeply unpopular war, and the rest of the west invaded. The US, Canada, and most of the allies all invaded Soviet Russia to aid the Whites (counter-revolutionaries, pogromists, reactionaries, and monarchists). They lost, but it left the country crippled, in debt, unable to access international credit markets. The revolution was incredibly popular in the geographies where it occurred, but it scared the world. In the US, fearful reaction to the Russian Revolution kicked off what was later called the First Red Scare.

Now, before the revolution, the US was riddled with leftist revolutionary outfits. The Industrial Workers of the World and the Socialist Party of America being among the most prominent. Both were against the war, for social revolution, and strongly opposed to capitalist exploitation of the working class. The leader of the SPA was Eugene Debs.

Eugene Debs was an amazing person, not only an stunningly good writer but (by all accounts) a fantastic orator. I have my undergraduates read some of his speeches when I touch on the American labour, syndicalist and socialist movement. In 1912 he won over 900,000 votes, and the party elected two United States Representatives (Berger & London), as well as "dozens of state legislators, more than a hundred mayors, and countless lesser officials. The party's staunch opposition to American involvement in World War I, although welcomed by many, also led to prominent defections, official repression and vigilante persecution."

For giving anti-war and pro-socialist speeches, and for being relatively popular, he was Debs was sentenced on November 18, 1918, to ten years in prison and was disenfranchised for life. The wikipedia page is actually quite good, and links to his speech at the trial, which is a classic of American oratory. His imprisonment casts into rather sharp relief whether there were any "good old days" in American politics where proletarians actually had much in the way of free speech or the right to organise in a militant fashion. See also the attempted eradication of the IWW in 1918. Debs would run again from prison in 1920, and garner an impressive ~3.5% of the vote. In 1920, 5 prominent socialists were expelled from the New York State Assembly in crude fashion.

The security and political apparatus continued to harass and hamper the socialists, even in their broken and much weakened form. Michael Cohen argues that vigilante movements, mainly those directed against radical workers' organisations (as well at the SPA) "were the vanguard of a reactionary social movement and played a critical role in the creation of the modern political intelligence system" which involved in the repression of the SPA. The actions of violent non-state actors against working people and leftist organizations were compounded by organisations like the American Legion, which and harassed the SPA and attacked and murdered IWW organisers (notably the Centralia Massacre), the Corporations Auxiliary Company which employed thousands of undercover spies, and the American Protective League which was a privately-funded and organised group that attacked radicals, unionists and left militants. All of these organisations (and there were many more) maintained a modicum of respectability due to support from the state and wealthy interests, and they all engaged in private espionage against workers on American soil. The APL did worry some politicians, but as it was an organisation whose interests dovetailed with those of the state and capital, it was given (largely) free reign. One historian noted that "the American Protective League operated with the approval and supervision of the. Department of Justice."

So, massive amounts of state and private repression, and imprisonment of its incredibly capable leader (which caused him to fall ill and die prematurely) and the elimination of its political ability, all wrapped up with the rise of centralist Leninism (the Communist Party of the USA picked up some of its members once the COMINTERN "showed" the ONE TRUE PATH to revolution).

Hope that helps.

EDIT: This response was deleted because it was apparently lacking sources, but I suspect it has little to do with that. Here are some good places to start if you're interested. I have taught courses on labour history and the left before, so if you'd like I can field some questions:

For the first Red Scare in Canada see:

Daniel Francis, Seeing Reds: The Red Scare of 1918–1919, Canada’s First War on Terror, (Arsenal Pulp Press, Vancouver, 2010).

For the best analysis of the American first Red Scare see:

Todd Pfannestiel, Rethinking the Red Scare: The Lusk Committee and New York's Crusade against Radicalism, 1919-1923, (New York: Routledge, 2003).

For the privatization of repression see the aforementioned article by Cohen, and:

Frank Donner, Protectors of Privilege: Red Squads and Police Repression in Urban America, (Oxford: University of California Press, 1990).

For an analysis of the destruction of the IWW (albeit abridged and actively ignoring the resurgence in the 1920s, to its detriment) see:

Melvyn Dubofsky, We Shall Be All: A History of the Industrial Workers of the World (Chicago: UI Press, 2000); The unabridged version is Melvyn Dubofsky, We Shall Be All: A History of the Industrial Workers of the World (New York: Quadrangle, 1969).

If you'd like the know more about Eugene Debs, the Marxist Internet Archive has an excellent source base, but the standard treatment is:

Bernard Brommel, Eugene V. Debs: Spokesman for Labor and Socialism, (Chicago: Charles H. Kerr Publishing Co., 1978).

The complete works of Debs can be found in three massive volumes, published by the University of Illinois (Urbana); any decent library will have them. A more condensed version can be found with:

Gentle Rebel: Letters of Eugene V. Debs (Urbana: University of Illinois Press, 1995).

As highlighted by /u/bohunkqueen, a great deal of state repression. There are two great books I recommend to get a great sense of this. The first is The Fall of the House of Labor: The Workplace, the State, and American Labor Activism, 1865-1925 but also Christopher Hedges' Death of the Liberal Class. They both highlight the vibrancy of the cultural background which made SPUSA and workers movements powerful and the extensive efforts business coalitions went through to reverse first the cultural basis, then the political grounds.

Extensive efforts were made to subvert independent press or labor based press--which was bigger than today's commercial press--consign the popular culture by secreting anti-labor messages, purge leftists in Red Scares from office or public positions of influence and power, and we can't forget the straight up propaganda that came from the Creel Commission but also its intellectual descendants namely Bernays and Lippmann who helped organize better methods to get business to better corral public institutions.

In Alaska, state repression ─ mentioned by /u/Vittgenstein and /u/bohunkqueen ─ took a back seat to internal problems and economic factors. While the First Red Scare following the Bolshevik Revolution led to sedition laws across the country and greatly hindered socialist parties and politicians, socialist political organization in Alaska was already on the downturn.

Joseph Sullivan's "Sourdough Radicalism: Labor and Socialism in Alaska, 1905-1920" is the core paper for studying the history of socialism in 20th century Alaska.

Sullivan tracks the growth of socialist parties and the Socialist Party of America in particular, revealing that it followed a similar trajectory to that of socialist parties in the Western United States.

Socialist organization had its roots among the people who came west looking for new opportunities and new lives, only to find themselves employed by the same oligopolies that dominated the East. In Alaska, the Guggenheim Syndicate was a watchword for corporate evil ─ true or not.

Frank Buteau is a good example. Born in Quebec in 1860, he came to Alaska and the Yukon in 1887, part of the Fortymile Gold Rush a decade before the Klondike. In 1911, he retired to Fairbanks and became a charter member of that city's Socialist Party. In 1914, he ran for city council and his party's platform declared:

"Alaska, the last of the great American frontiers, the home of the pioneer, is rapidly becoming a thing of the past. The dreams of the lonely prospector are giving way to the ugly realities of wage slavery and job hunting. The nightmare of Capitalism already haunts the workers of Alaska. It is only a matter of time until all the accompanying evils of this system will be rampant in the Golden North."

Between 1900 and 1912, the Socialist Party of America grew its membership from 10,000 to 107,000. Socialists won seats in Congress, state legislatures and the mayorships of over 80 cities and towns.

In the West, and in Alaska, membership was rooted in groups like the Western Federation of Miners, which led strikes for better pay and working conditions. In 1902, it formally declared itself a socialist union advocating employee ownership.

In 1906, Local 240, Nome Mine Workers Union was a chapter of the Western Federation of Miners. During that year's election, Local 240 combined with the more conservative American Federation of Labor and won five of seven at-large seats in the city's council election. The following year, the "Nome Labor Party" ticket again won a majority of seats.

In 1908, Joseph Chilberg, a deli owner who was the flagship candidate of that ticket, ran for Congress, winning 25 percent of the vote, good enough for second behind the redoubtable James Wickersham.

In the Interior, the WFM chapter was hammered by a failed strike broken when strikebreakers were shipped in from the coast to replace striking workers. This weakened the labor parties, allowing the Socialists to replace them.

The 1912 election was supposed to be the turning point. The Socialist Party had local chapters in 10 Alaska towns, and its candidate for Congress, Kazis Krauczunas, was known for being the U.S. Immigration inspector for Alaska.

The party's platform called for unionism, anti-child labor laws, the construction of public highways and railroads in Alaska, the elimination of absentee claim-staking, the operation of all coal mines for public use, and laws against anti-union blacklisting. The Socialists also demanded a stronger Alaska Legislature, an eight-hour day, elections of judges and mining inspectors, a tax per acre on corporate mining property, voting by secret (Australian) ballot, and initiative, referendum and recall powers for voters.

Krauczunas finished third in the election, just 40 votes behind the Republican candidate but almost 1,600 behind Wickersham, who won in a landslide.

While the socialists did elect a candidate to the Fairbanks school board in 1913, the 1914 elections were a disaster for them. In Fairbanks, there were 21 candidates running for seven at-large seats, and eight of those candidates were socialists, competing against each other for the socialist vote. As a result, none were elected.

After the elections, there was a great deal of infighting between Outside organizers and those considered to be long-time Alaskans. Accusations of "carpetbagging" were thrown back and forth, and this crippled the ability of the party to organize and consolidate behind a single candidate, platform or issue. As Sullivan writes, "Corrupt election officials and company goons were never able to surpass the Socialists in their ability to wreck their own party."

After the United States entered WWI, sedition acts came into play. Just as Eugene Debs was tried for sedition, so too were Alaskans involved in the socialist party. Some were acquitted and others convicted, but the net effect was to "effectively stifle whatever electoral support the Socialists might have attracted or revived while weakening the miners' unionization efforts by associating them with disloyalty and treason."

In short - World War I happened.

Socialism in America can trace its roots back to progressivism, and in fact many of the leaders of the progressive movement (Eugene V Debs, Jane Addams, etc.) would be major figures in the socialist party. Both parties were very progressive for their time, with Teddy perhaps being the most progressive one. Workers were seen as underprivileged classes, and the Farmers Alliance was one of the most powerful groups in America up until the turn of the century.

Then the democrats, well Wilson, was elected. This was sort of a prove it deal for the democrats, as they were the party of recession (1870s) and hadn't had real power since that point. Wilson, an idealist, truly believed in many of the progressive platforms, and while still a racist, was surprisingly egalitarian because of his northeast roots as President of Princeton. The democrats even gained a majority in congress to go along with the Presidency. Wilson was able to manipulate congress better than any other president in American history (he even wrote a book about doing it!)

Then World War I happened in Wilson's second term. Right before the U.S involvement in the War, the Tsar's government had fallen, leading to a provincial government. Then ~8 months later that government was taken over by a supremely radical group, the Bolsheviks.

There is really no way to describe just how scared the West was of this, because of just how radical they were (they even refused to pay back foreign loans!) and because of how many people who sounded awfully similar to them were in the western countries.

War time gives governments extra-judicial power. In America, this meant that a lot of those progressive ideas were able to be implemented, without having to go through that long, arduous bill stage - it could just get done. An example of something progressives had been calling for was nationalization of the railroads, something which occurred during WWI. Another, more seedy example would be the Council for National Defense, with a department named the Committee of Public Information - the Creel Committee

This committee is what spearheaded the attacks on all supposed subversives. This committee is what A. Mitchell Palmer tried to replicate with his Alien and Sedition Act. This committee is what killed socialism, in all its forms, in America. But, this is only because it was extremely popular. People were so scared of anarchist bomb plots and mail bombs (which Palmer actually received) that they were willing to see past the obvious civil liberty violation just to nab all those unamericans.

This, along with Wilson's failure to gain his "Peace without Victory," the slowdown of the American economy following the end of the war, many Americans distaste for Democrats following the war for their insistence on pushing their agenda through Congress, and the Democrats alienating their base, farmers, all led to the end of Progressivism in America. And, without progressives there are no socialists.

I might be late to this thread, but I must add to the conversation how integral the 1939 non-agression pact between Soviet Russia and Nazi Germany was in further undermining leftist politics in the United States. Yes, the Bolshevik platform proved unfavorable to Americans from its inception; however, writers such as Langston Hughes were expressing pro-Soviet sentiment throughout the 1930's. (Skip to "One More "S" in the U.S.A." from that collection if you just want to find the most overt.)

This was a joint declaration by Nazi Germany and the USSR in 1939:

After the Government of the German Reich and the Government of the USSR have, by means of the treaty signed today, definitively settled the problems arising from the collapse of the Polish state and have thereby created a sure foundation for a lasting peace in the region, they mutually express their conviction that it would serve the true interest of all peoples to put an end to the state of war existing at present between Germany on the one side and England and France on the other. Both Governments will therefore direct their common efforts, jointly with other friendly powers if occasion arises, toward attaining this goal as soon as possible.

Should, however, the efforts of the two Governments remain fruitless, this would demonstrate the fact that England and France are responsible for the continuation of the war, whereupon, in case of the continuation of the war, the Governments of Germany and of the USSR shall engage in mutual consultations with regard to necessary measures.

Naturally, this was terrible for any pro-Soviet socialists within the United States, and the stigma surrounding them was further exasperated with the inception of McCarthyism and development of the Cold War directly following the end of WWII.

Sources:

Wikipedia

Wettig, Gerhard (2008). Stalin and the Cold War in Europe.

Primary source as documented by Yale University

Another dimension you might want to look at is how the SPA played out in rural areas. Aside from Maoism and its attendant ideologies, socialism is often thought to be an urban industrial phenomenon. In America, in fact, the largest Socialist Party chapter was in Oklahoma.

The SP Oklahoma chapter was successful in organizing some farmers, preachers, sharecroppers, American Indians and so on. In its ascent to power, it was given to white skepticism of non-white groups, which caused a weak point in the movement in the beginning, and which was never really resolved, despite the best efforts of Socialist Party organizers in Tulsa and Oklahoma City. The large capitalist landholders and business owners, as well as the Democratic Party, knew about this weak point and exploited it to the fullest extent that they could. Eventually, the tension caused the SP Oklahoma, again, one of the largest chapters to exist in America, to collapse. In my opinion, the action that the businessmen and Democratic Party took could be considered a forerunner to Nixon's Southern Strategy; where politicians scared white working class with possibilities of blacks, Latinos and other minority groups of taking political and economic power away from whites, thus organizing them to vote and act against their economic interest and against the economic interest of the working class as a whole.

If you want a solid source for this, see Bissett's "Agrarian Socialism: Marx, Jefferson and Jesus in the Oklahoma Countryside, 1904 - 1920."