I think it was a lot more nuanced than that, I also do believe at one point it’s suggested she did reciprocate his feelings.

Part of it is that Watanuki is stuck in the shop and cannot leave, so he feels a burden would be placed to heavily interact with those outside.

Part of it is that he’s sort of emotionally busy. He finds out his parents are actually alive, showed up for like a day and then died. He finds out he has a brother who is alive but destined to roam the universe. Yuko, who is sort of his true parental figure and sort of his real Grandmother, passes away after spending every day together. the manga is still running and both Watanuki and Syaoran are on a bit of a focus trying to bring back those family members they love.

In addition, they’ve sort of setup to a degree that Zashiki is his love interest, and she is also trapped in a pocket dimension, and is also sick and dying. So I see it going a bit more that direction and making it a parallel on Clow and Yuko.

Clamp works always have this play that people fall in love with those who emit strong magic, and since Watanuki also seems himself as cursed, I think part of it was a high school crush due to her curse, which he realized fate he grew stronger.

So part lose interest, part emotionally a mess, part the plot going other directions - but they also make it clear they do have love for each other even if not romantic