Well you are right ive been searching for like an hour to try to find out what happened so i came up with 2 theories
1st. a lot of players got banned
you can check this
here but it seems i cant really sort these results out in order to understand completely if something like this happened
2nd. Players spent less time in the game
Bare in mind that the graph you are looking shows the player activity if you check the total users graph you can see that torn has gained a lot of new users since 2010 so this makes me belive that actually new players found out about the game but they spent less time because maybe the got bored or reached a point that there wasnt something more to achive so they could go some days without playing(or completely quit) plus the new non-text based games that came out during 2010 and after. Nowadays textbased games dont really attract a lot of people and most of new players go inactive after some days of playing,this this is due to the complexity of the game in the first days
Maybe nothing of the above happened i guess we will never know