Hung Parliament. Remember, the Tory majority in 1987 was over 100; it would have been difficult for Labour to overturn that. Thatcher was still an asset to the party but not as much as John Major turned out to be in 1992.
Thatcher would have went to the country in 1991...probably not long after the Gulf War. In the 1991 Local elections, despite gaining a wave of seats from the Tories, Labours vote share was 6%down on 1990 and the Tories were up around 2%.
There was an obvious difference between the 1990 Tories and the 1991 Tories which might be an explanation for that...
The Tories got rid of her because she was a liability and they knew it.