Casascius stopped making coins because the U.S. government threatened to prosecute him.
Just to add more specific into this, within the entities of the U.S. government, we're talking about the US Financial Crimes Enforcement Network (FinCEN). Mike Caldwell, the "founder" of the Casascius coins had been selling them from at least 2011[1] and around 2013 he received a letter from FinCEN claiming that his activities would be seen as "money laundering" services. If you had accessed his website around that time (November), you'll see this warning on his website:Quote
“For the time being, I have suspended accepting new orders, pending resolution of some concerns I have as to regulatory issues. I am anticipating a possibility of having to prequalify buyers, and am holding off taking orders until I know for sure.”
You can read a bit more about it here[2]. Just a quick note that Casascius coins weren't the only coins "shutdown" for this kind of service - at least with loaded coins - Ravenbit, Cryptmint and Titan Bitcoin (iirc there are others) are some companies that also saw their activity ceased on the grounds of "money laundering service". I suppose that one thing is to buy/trade theses assets on a digital level, the other is having this assets being issued a physical manifestation that directly competes with the currency of one's country - in this case the U.S dollar...As a end note, if you are interested in knowing how many Casascius coins are still out there being waiting to be "claimed" you can check out this[3] website for a quick trip of information.
[1]https://en.bitcoin.it/wiki/Casascius_physical_bitcoins
[2]https://www.coindesk.com/markets/2013/12/13/bitcoin-mint-casascius-shut-down-by-us-regulators/
[3]https://casascius.uberbills.com/
