In short: It failed to be effective enough.

USW (Unrestricted Submarine Warfare) did cause damage to the economy of the Entente. It fell short of its aims and was not effective enough to strangle Britain out of the war. Additionally it was probably never likely to.

Until 1917, USW was a thorn in the Ententes side. It wasn't achieving a strategic victory but it was certainly painful and damaging to the economy of Britain, albeit on a level that could be sustained. Once 1917 begun with the resumption of USW at much higher levels the U-boat campaign reached its apex in shipping damage. That Spring saw more tonnage sunk than the first two years of the war combined, and in March-April had finally reached levels of success that the British could no longer sustain. Nearly half of shipping to Britain was being sunk. Something had to give - either Britain in the war or the Admiralty.

And herein lies the rub. Counter strategies had already been devised to limit the success of submarine warfare. They were simple, effective, and only had a moderate cost. The strategy was to simply travel in armed convoys. The admiralty hated it. The concept of defensive action was considered unprestigious and a waste of resources. However with unsustainable shipping losses through the Spring and early Summer of 1917 the admiralty was forced to accept convoys as a necessary course of action to continue the war.

A further deadly complication to the success of USW was a fundamental misunderstanding by Holtzendorff in planning. He believed that Britain relied on food imports due to physical necessity rather than economic choice. In war, sacrifices can and often must be made. Over two million acres of land were converted from grasslands to farms in 1917-1918, with another million planned for 1919 on the assumption that the war would continue. In total nearly 4 million acres of unused land were converted to produce staple goods during the war.

This story repeats for many basic staples. Timber was never threatened to the point of strategic shortages. If they had been through USW, the whole of France's forests were available for import with near impunity. Much of the shipping lost hurt Britain but that damage created the drive to mitigate it through internal production of war goods rather than importation.

The efficacy of USW immediately tapered off after the implementation of convoys and the losses of U-boats mounted. After the early summer of 1917, the campaign never again reached the impressive levels they did. It was ultimately an effective strategy for a limited window but was nowhere near effective enough to create widespread shortages that could be exploited for a decisive victory on the Western Front, and as you know drew several previously neutral nations into the war against the Central Powers which culminated in their doom. We will never know whether Britain could have mitigated it had it been sustained because USW was ultimately unsustainable and its limited effects resulted in a military shift to dampen their success.