It was definitely higher quality from a technical standpoint. Like you said, it wasn't prone to magnetic decay like a VHS tape is. Also it was capable of higher resolution than the VHS.

So why did VHS win the format war? Good question. Perhaps people got tired of turning their laserdisc over halfway through the movie. Perhaps they just weren't willing to shell out the extra money; laserdiscs were more expensive than VHS tapes, and laserdisc players were quite a bit more expensive than VCRs. Strange but true: sometimes inferior products ended up with the corner of the market for various reasons that had nothing to do with the product itself. Like computers. The Commodore line of computers was vastly superior to the IBM line in almost every respect, but IBM won out quite soundly...