The problem was, the Liberals favoured ranked ballot but would consider STV, the NDP wouldn't support anything other than MMP, the CPC wouldn't support any change, and the Bloc just wanted to play spoiler. The Liberals were in a minority on the committee because they needed to be to ensure legitimacy. If they'd just imposed a system, the CPC had already said they'd overturn it whenever they gained power. Having cross-party agreement would have made that much more difficult. The only system they could get agreement on was MMP, which is what the committee recommended.
MMP is good for proportionality, but it can have issues with party lists, members not tied to geographic areas can be difficult to remove, and responsibility for geographic areas is shared, making it easier to dodge. Whether MMP would even pass constitutional muster is an open question. The biggest drawback is explaining the system to a general public who only have known a one vote, one member, one riding system. Ranked or STV are much easier to explain and the current ridings wouldn't need to change.
Anyway, the Bloc and CPC were going to campaign hard on calling any change a Liberal power grab. Internal polling (not the dog and pony show web poll) showed that most voters didn't care about the issue, but the "Liberal Power Grab" would gain traction. With the CPC promising to roll back any changes, the whole thing looked more and more like an effort in futility.
In the end, they decided to take their lumps and move on. After all the heat they took for even trying, as far as the Liberals are concerned, the issue is dead. Basically a similar story arc as every time a provincial government has looked at it.
The CPC never wanted it in the first place, and won't bring it up if in power. The NDP essentially don't exist at the federal level east of Ontario, have a shot at maybe a handful of seats on Ontario, a few more in Manitoba, will be shut out of Saskatchewan and Alberta but will pick up seats in BC. The Bloc will continue to play spoiler, and the Greens, after their self immolation, are irrelevant at the federal level.