I doubt it was a legal issue, but I don't have any hard data. I know they were very careful to go for the "Space Gun" look b/c there first stab at this came out about the same time as the Columbine shootings in Colorado. And they also discontinued their pedals and a lot of their race wheels at the same time, so I suspect it was more financial than legal.
I wish they'd come back or release the new product, though.