I think part of his problem is back then trying to sell out was taking a lot more serious. LL got a pass on it because he always came out on the Ladies Man tip and did a better job of playing both sides. Kane at one point went full blown with trying to appeal to the masses plus the optics of all the Madonna shyt. He lost his core audience and when you go the mainstream route you become disposable as they quickly move on to the next hot thing. Kane had the ability to update his style and change with the times but took too long to do it. He showed that versatility in his first two albums.
I thought he was poised for a comeback after his feature run in the late 90s. I remember him having a lot of buzz off that Big L feature (think it got verse of the month in The Source), Prince Paul feature, and I think he was on a track with G Rap and Chino XL on the Sway and Tech album but then nothing.
I think it is simpler than this. Kane was never on LL's level in terms of popularity. Kane was going Gold at best, LL was going multiplatinum. LL could afford to suffer in terms of popularity for a while and still have a chance to recover. Once Kane fell off the map, on the other hand, that was it.
Kane's 1998 album Veteranz Day was actually decent. He was sharp as ever lyrically, and the songs were decent/good. The problem was it got no promotion in terms of the label, had no prominent guests to connect him to a new generation of fans, etc. If he had had a chance to follow up on the features from 1999-2001 that you mentioned, maybe he could have had a more substantial comeback. But even then, he was never going to become a platinum artist and probably not even Gold. It would have just been a strong comeback relative to what his status had been.