A new model isn't the same thing as improving the entire model range. No one is going to care that they can buy a Corvette Z06 except it weighs 600 pounds more and is 20 grand more expensive than a faster model already sold when the car they were looking at was the moderately equipped V6 model that hasn't gotten any of those cool things; which is where the huge majority of the sales are and have always been. Ford has done a lot to chase that market every couple years since the 1990s while dramatically improving the car as a whole rather than just specific versions, whereas the normal Camaros are largely the same as when new. The Camaro isn't as bad as the Challenger has been in updating it's problems, nor are its problems as notable to begin with since the car was always better than the Challenger anyway; but GM hasn't said anything substantial about a next car just as Chrysler has been constantly waffling over what the Challenger will become. And the new Mustang is already here.
That's the same lack of foresight that got the Camaro/Firebird killed off in 2002 (and the Challenger/Barracuda killed off in 1974), because no one then cared that the Camaro then was just as fast as the Corvette for only 2/3 the money when you got the best one when the base model hadn't improved at all since 1995.
And for that matter, last I checked, the Challenger very blatantly competed with the Mustang and Camaro even in 1970. They didn't accidentally enter the car in Trans Am; or give it all of the same engine and performance package equivalents to the Barracuda (which themselves all had direct Mustang and Camaro equivalents) as a goof.
The Mustang's worst year in the past 5 was 66,000 cars, which was the final year before the car was refreshed. It's averaged ~75,000 a year since. The Camaro's worst year was its first year, where it sold 61,000. It's averaged ~80,000 a year since.
The Challenger's best year was it's third, where it just crested 57,000 (Mustang: 73,000; Camaro 80,000), but otherwise has slummed around half of the other two at best.