It was cancelled because of dwindling ratings and being replaced by another show. The same fate that many great shows (coughFireflycough) shared.
From Futoncritic.com: (emphasis mine)
"John Doe's" search for the truth is over. A source close to the FOX series has informed us the network will not renew the series for a second season. The producers of the drama were informed yesterday about the news.
The news comes as no surprise after recent reports had the network's support shifting from "Doe" to "Fastlane." FOX executives had repeatedly stated they hoped to keep one of the two dramas for next season as part of a new Thursday or Friday lineup.
After debuting to an impressive 9.8 million viewers in September of last year, "Doe's" audience dropped more than 40% by its finale last month (5.8 million viewers). Among adults 18-49 the erosion was even more noticeable (4.3 vs. 2.4 average rating for the hour) as the series routinely finished third in its time slot among the four major networks.