Her big issue was that she was told by family and the industry to gradually phase out. She was now married and they wanted her to vacate her spot in the industry so her sister could be launched. This mentality that actresses needed to retire after getting married was the common notion back then and what occurred to most of her contemporaries too so it wasn't just Karishma.
I think her career would have been fine and lasted longer had it not been for these two things. She also came to the point where box office success was not as important to her as critical success hence films like Fiza, Zubeidaa, and Shakti: The Power. The former was still a hit I believe but the latter two did not do well at the box office but they are considered some of her best performances. I'm sure she would have continued to act alongside SRK and Salman (maybe not Aamir since after Rangeela and Raja Hindustani, he started to avoid films where the heroine could overshadow him) had she kept her career up.
The other issue was that it wasn't just Karishma who was retiring but all her contemporaries. Sridevi, Madhuri, Juhi, Kajol, Raveena, etc. all settled down to have families. Urmila and Shilpa were the only ones from the 90s who were still going strong. Juhi is another sad case because she did want to keep working as a leading actress so retirement was not because she got married and had kids. Her issue was that her films started doing badly especially the flop of Phir Bhi Dil Hai Hindustani. That flop more or less ended her career as a leading lady but you can tell she still wanted to act since she kept producing films with SRK and taking supporting roles. The funny thing is if you watch her in Phir Bhi Dil Hai Hindustani or One 2 Ka 4, she still looks so young, fresh, and vibrant that even actresses much younger than her seem to pale in comparison to her. But because she had been working for over a decade, audiences had mentally aged her off the screen.
Shilpa had that problem as well since she had been working since the early 90s but she didn't really reach leading lady status until 2000's Dhadkan. That more or less kept her relevant and able to continue a career when her contemporaries were all settling down. Urmila was probably saved because she had RGV, carved her own niche in the industry, and didn't get married or have kids like her contemporaries.
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