It seems like they had positive effects on the hosting cities so why did they just stop happening?
Worlds Fairs are still held; several every decade.
Here's a discussion from a couple of years ago on why we don't notice them as much nowadays.
Perhaps the bigger question is why they stopped being a big deal to the general public.
They never went away. The next world's fair is Expo 2017 and is to be held in Astana, Kazakhstan.