In the late 80s and early 90s, most games had an extra life mechanic. The player started with limited lives (often three) and dying depleted one of them. If they still had some remaining, they would respawn at the last savepoint. The game would end once all lives had been used and they had to start from the beginning. Players could obtain additional lives during the game.
This mechanic was so widely used that it was rather the exception when games didn't use it. It was and still is one of the most recognized video game clichés (the above image has been printed on countless shirts).
Nowadays, this mechanic seems to have been forgotten.
Almost every modern game gives the player infinite retries from the last save. Many even let the player make their own savepoints with a quicksave mechanic. Those few that try to be different tend to go for the other extreme: The "roguelike" mechanic gives the player no retries.
What happened to the middle-ground of having extra lives? What game design revolution caused the game industry to abandon this feature?
When proposing an answer to this question, please try to back up your answer with citations and factual, objective evidence as much as possible so as to avoid dragging this post into the territory of being "too opinion-based." Focus on "what" happened and "when," which specific examples.