Competing against HD in the Big Twin cruiser market is always going to be an uphill battle; after all, you're fighting against a 100 plus year history of brand recognition, and "Harley" is as implanted in peoples' minds as a name for cruiser as "Xerox" is implanted in some of us older guys as synonymous with photocopier. The Japanese could do it because they already had a long established tradition of making motorcycles (with the attendant name recognition, economic power, and dealer network) before they got into the Harley clone type bikes. Jumping into that market and trying to sell only cruisers (with no other kinds of bikes to appeal to other demographics), and competing with a company that sells in the range of a quarter million bikes per year would be a tightrope walk for any company. Polaris trying to do that while owning both Victory and Indian would be doubly difficult; in a sense, they are competing against themselves in a market already dominated by one company.
I'm sorry to see any American bike manufacturer fold up shop, though I've never been a Victory fan (way too "Arlen Ness-y" for my tastes). I'd love to be able to buy an American made sportbike or ADV bike that had the engineering quality of a Japanese bike, but I don't think that's ever going to happen, unless they ban the import of all Japanese and European bike makers.
