Reason Number One is, of course, her need to maintain creative control at all costs. At the time, it was noted that the first book looked a lot better than the second because the people at the publishing company involved got on her nerves by making "unreasonable" demands; said demands included "providing cover art that won't repel a potential buyer", "letting artists who don't act as if using erasers is an atrocity assist her" and "listening to someone for a change instead of throwing a damned fit when changes are suggested." Since she had the same bad experience from them that she had from anyone else who hated her and wanted to hurt her by saying the hateful, hurtful words "You can do better, you know," the second book was produced by the people who do the collections. The problem is that neither book sold especially well owing to the same problem that derailed the Farley plushy: her fussy need to correct the end result of her poor ability to give directions.
The second reason is also rather simple if you remember the strip's history. As history teaches us, in order to make Farley sympathetic in any way, you end up having to do something Lynn would rather not do and make Elly into an active antagonist. Let's review both of them to see what I mean:
1) Faley Follows His Nose:
As you will recall, this is sort of a tidied-up version of the arc in which Farley runs off after a female dog in heat. We have Farley making a break for it, having adventures and being lured back by Phil to get yelled at by the imbecile housewife whose witless negligence caused the crisis in the first place.
2) Farley and the Lost Bone:
The point of the book is that Farley is said to know that he buried a particularly good-tasting soup bone somewhere in the back yard but not specifically where. While he inconveniences the Pattersons, Lizzie starts to figure out what's going on and gets John and Mike to lay off creeping on him because he didn't mean to bother them. They do so because they understand Farley isn't a human being. Elly, on the other hand, blows a gasket because her flower bed is messed up, Farley is filthy and (I should think) people are telling an EVIL LIE about Farley not understanding what he did to anger her because if they're telling the truth, she can never bawl, bully, berate, bludgeon or bargain her way into winning over his instincts.
What this tells me is that a third book would continue merrily on with the theme of "Elly Patterson: Belligerent, Dim-Witted And Antagonistic Failure" and add an extra incentive for Lynn to avoid the horror of losing absolute creative control. Beth wanted to keep doing this and probably became evil and wrong because she exposed Lynn to being told what to do and Elly to looking like a fool. We might have had "Son Of Farley" and before you know it, even the Jim Inmans might start to realize that Elly's stupidity got Farley dead.