While the 757 program had been financially successful, declining sales in the early 2000s threatened its continued viability. Airlines were again gravitating toward smaller aircraft, now mainly the 737 and A320, because of their reduced financial risk.

Boeing officially ended production of the 757 in 2004 primarily because airline demand for the aircraft had fallen sharply. In the early 2000s, the aviation market was shifting; airlines were looking for either smaller, more fuel-efficient narrowbody planes (like the 737 Next Generation) for shorter routes or larger widebody planes (like the 777) for long-haul journeys. The 757, while incredibly powerful and capable of "hot and high" takeoffs, became a "niche" aircraft that was too large for many domestic routes but lacked the efficiency of newer designs for very long distances. Additionally, the rise of the Airbus A321—which offered lower operating costs per seat for similar missions—put immense pressure on the 757. Boeing concluded that the cost of developing a "next-generation" 757 outweighed the potential sales, leading them to focus their resources on the 787 Dreamliner and 737 MAX programs instead, leaving a "middle-of-the-market" gap that is only now being fully addressed by the A321XLR.