I think if IOmega had reduced the license costs for the disks, and had disks gotten under the $5 mark, they'd have held on for close to another decade before larger USB drives displaced them.
I worked for IOmega's support call center for about a year when I was younger... mostly in the OS/2 queue which was also 2nd level support. The Jazz drives were much worse in terms of click of death, I always just RMA'd the drive and the cartridges when it happened, as nearly always the drives would damage heads and vice-versa... this was much more rare with the zip drives.
I remember a friend getting together a spare computer around 1996 or so, we managed to get everything needed to boot with just enough zip drivers for the parallel drive on a 3.5" floppy, using the zip drive in place of an hdd that he didn't yet have a spare hdd for. Was definitely interesting at the time.
I also remember first installing NT4 from a zip drive copy. Those later BBS and early internet days are some times I remember very fondly.