Here goes my humble opinion.
Minecraft has resolved one of the big issues in the video game industry, and done fairly well, destructible and constructible terrain, in other words, you can modify completely the terrain and build anything you can think. The system is extremely simple and very powerfull, as all we know, a world made of lots of blocks. (Minecraft is based on Infiniminner, so really Minecraft hasn't resolved anything :p)
This method works fine, aside from aesthetical issues, providing many possibilities of different gameplay.
Many of us have seen that potential, and some with programming skills (and free time) has programmed his own game engine.
The result is that there is multiple "clones" of Minecraft out there.
The problem here is that every clone tries to clone almost exactly every Minecraft feature, (technical and gameplay) aside from the blocky world (obviously unavoidable), they clone the same pixelated themes, the similar cubic aesthetic (mobs made of blocks etc), the same recipe system, the minecarts idea, the redstone circuitry, absolutely everything is cloned.
Minetest has this problem, and it's worse taking in account that it's meant to run in old hardware, so we never will see real 3d mobs (I mean, 3D mobs with more than 300 polys each), or smooth connections of block surfaces
http://minetest.net/forum/viewtopic.php?id=38 (great idea btw) or bump mapping, specular lighting, real time shadows, dynamic lighting, some decent dynamics, only because all those features doesn't fit with the main purpose of the engine.
Those are technical features that would make Minetest somewhat less clone, and can attract some people, but they are not easy to implement.
The other problem is that I have the sense that the main developer has released the mod api mainly to please the hungry crowd so he can take a well deserved rest, allowing the community to continue (in part) his work. That's very good, but it makes me think that version 0.5 or at least V0.4 stable will take very long time to be released. Many mods are impossible to do because the mod api needs to be expanded so we can enjoy a boat ride near our beach house or go down to the mine in a super fast minecart. We are stuck at this point I think.
Aside from other issues, maybe that's why people are losing interest.