The store was a constant source of problems for neighbors, who complained for years about aggressive panhandlers, drunks, public urination, harassment of women and more by people who hung out at the store. The store also broke various rules and laws throughout the years, like providing to-go cups for booze, selling to minors, violating operating hours, and much more (see this comment thread for examples.)
They had at least five investigations by the city's Alcoholic Beverage Control Board and there were numerous neighbor complaints and petitions about the place. A few years ago the ANC denied their request to move across the street after massive local opposition.
I'm not sure what's coming next to that location. There's a plan to replace that building and neighbors with apartments, but not sure how long that will take.
I shop at liquor stores and know they're valuable. I have no problem with liquor stores that follow the law and are good neighbors, but Petworth Liquors was not, even after multiple neighbor and government complaints. And now they're closed. It goes to show that you need to hold up your end of the deal and do what you're supposed to do if you want to be in business here.