I've posted this before, but it apparently needs repeating:
The 737-900ER is what killed the 757. Aside from some range, the 737-900ER could do pretty much anything the 757-200 could, cost less to operate, and it cost much less to build (and hence Boeing could charge significantly less for it and still make money. The airlines simply did not see enough value in the extra range of the 757 to offset it's much higher price. Boeing tried to save the 757 with the 757-300, but it flopped big time (costing Boeing a big chunk of change in the process).
By the time Boeing pulled the plug on the 757, the production rate had gotten so slow that the factory overhead was a killer. Boeing repurposed the factory space that was producing ~1 757/month into a 737 line cranking out 14 highly profitable aircraft per month.