I recall reading Chuck Yeager liked the F-20 more than any other plane he'd flown.
The problem with the F-20 was twofold, as I recall. The airframe itself was stretched to it's limit, even though the engine upgrade really made it shine. The legs were just too short to really be of use on rough airfields and the versatility in load-out wasn't there. Indeed, it had never been a real general purpose workhorse, for all it's good qualities. Essentially, nothing more could be squeezed from it, when everyone wanted a new compromise...
Meanwhile, the F-16 was coming on - and being heavily promoted by the U.S. war conglomerates. Northrop's entry could compete with the Falcon on most levels and even surpassed it in some arenas. For example, I seem to remember that it could get spun up and airborne, radar hot and ready to fight, while the F-16 was still rolling out.
But it just wasn't capable of toting enough goodies aloft from marginal support bases and by a stroke of bad luck, it used the same engine as the Falcon... so it was left to languish.
At least thats what I think I remember!