From little I have read about TOD it seems that the ratings were low and that is the reason it was canceled. I can't believe that. I loved the show then & still do as do many many other fans.
TOD ran into the economics of commercial television. As you know, television works by selling air time to sponsors to advertise their products. For a show to succeed it must be watched by a LOT of people. Not only that, but they have to be the RIGHT people too, the demographics kick in here. The audience the sponsors want to reach is in their early 20's to mid '40's, and must be both male and female. TOD had a reasonable audience, but it was overwhelmingly male. This is not good. There is an axiom that female viewers won't watch a show without strong female characters, and TOD spent a lot of the first and second season trying to introduce them. The problem THERE was that TOD was about an infantry unit, an all-male group whose job was to go out and kill people. In the 1988-89 season "China Beach" debuted on another network. It was also set in Vietnam, but it was about a military hospital with nurses and USO performers and Red Cross girls and its ratings with women were great. They also weren't there to kill people, but to help save them, which went down better with the viewing audience.
TOD's other problem was its timeslot. At the time CBS was dead last in the ratings. They had high hopes for TOD, and threw it up against "The Cosby Show". The Cosby Show was a true television classic, starring a comic genius and appealing to all races, genders and age groups. Even the TOD's "founders", Steve Duncan and L. Travis Clark could never bring themselves to urge viewers to watch TOD instead. We never came close to beating Cosby, although we did okay against some of his reruns. (The third network competitor was "The Father Dowling Mysteries" which mostly appealed to older viewers. It was no threat to us.
Thereafter the show had its time period switched around several times. This isn't good, since it confuses viewers and usually costs you your core audience. This also hurt us.
On the other hand, TOD's rating were never high enough to normally justify renewal, but CBS was losing the ratings game anyway. TOD was a critically acclaimed show and it didn't hurt CBS to keep it on as a showpiece

I think that show was also very educational. I know I learned a lot from watching it since I really don't recall much about the war while it was going on. It surely has made me see it in a new perspective and I have a lot of respect for all Vietnam vets from watching it. It think it will have the same effect on a lot of people.
The show was very controversial when it came out, mostly because it showed the soldiers in a good light! Up until the dedication of the Vietnam Memorial in 1982, the "popular culture" image of the Vietnam veteran was of a drug addict/baby killer who had been beaten by some rice farmers. When the show came out, TIME Magazine was bemused (I want to say "annoyed") that it showed military commanders who actually cared about their soldiers' survival.

I also heard that the US Army was not particularly happy with the third season, because of some of the content in the shows about the SOG, and that was another reason for its cancellation.
No. Not true. The Army had canceled its active assistance before the second season began, largely because of all the negative scripts. (The actors themselves called it the "Psycho of the Week" season.) The Army wasn't actually being unfair. They were willing to support a show with a negative theme, drug use, perhaps, but they wanted a counter theme that this was against Army policy, and see the culprit brought to justice by the System, so to speak, by the end of the show. Of course "The System Working" isn't a very dramatic concept, so......
Actually the Army had only stopped ACTIVE participation at the end of the first season. Active participation was allowing the use of its aircraft, artillery pieces, etc, the use of military personnel, and filming on military bases. (The show was allowed to sort of "rent" the equipment, pay fuel costs etc, and "hire" the personnel as extras. The Army wasn't out any money.
However, right to the end, the Army' continued to advise the show. Their Public Affairs Office in Hollywood got the scripts with all the changes, reviewed them, made suggestions and assisted with information. I used to speak with the PAO people almost every day and we would discuss upcoming episodes and what we might do with them. I mostly agreed with them, but I felt I was the intermediary between the Army's desire to present themselves in the best light and the dramatic demands of a TV show. I'm sure my third season replacement, my friend MAJ Mike Christie, felt the same.
One thing that the Army was VERY concerned about, and TOD too, in a different degree, was in NOT showing veterans in a bad light. There had been too much of that in the past. The same went for the South Vietnamese armed forces, who are generally shown in a favorable fashion.

How do the actors learn and remember all those lines.
That is THEIR job! LOL. TOD was VERY hard on the actors, especially the "principles" who got up very early each morning for transportation to the set, makeup, and then doing physically demanding scenes over and over again. The episodes were not shot sequentially, but "by location". Then back to their hotel for a quick dinner, then learn the next days lines, which had changed overnight, then go to sleep and do the whole thing over again the next day.

How was Tour of Duty developed?
To start with, it was, "sort of", based on the 1960's TV Show "Combat", except that the character of "Zeke Anderson" was based on "Master Sergeant Clell Hazard" from the movie "Gardens of Stone". We reduced his age, rank and worldly experience but, like Hazard, Zeke had served before in Vietnam (two tours) and looks forward to becoming a fishing guide in the Pacific Northwest. If you haven't seen "Gardens of Stone" I recommend it highly, and the book it was based on, more. (More on this later)

How accurate was ToD?
Well, let's say it was "television accurate" A lot of things couldn't be shown or dealt with. Not only were there obvious restrictions on violence and profanity, but other matters too. For example, after their exposure to combat, soldiers soon learn ways to inure themselves to the death and violence around them. A cynical, even malicious sense of humor is one minor way, but this would be too shocking to a general audience. Callousness also came with the job, but ToD soldiers never show this. They are always ready to stop the battle to mourn a fallen comrade or help an innocent civilian, just as our viewers would want them to do. Soldiers in Vietnam also used a particular slang, with Vietnamese words and period expressions, but the writers felt it would be too hard for the casual viewer to pick up. But beyond even those issues there were basic problems with how the show was written. As anyone knows, who has been in the military, officers like Goldman give the orders and sergeants like Anderson see they are carried out. ToD let Anderson give most of the orders himself. After working with the Army set advisors for awhile, I heard that Stephen Caffrey realized this and was reportedly frustrated that he wasn't allowed to command the unit the right way. Then there was all this stuff about disobeying orders. You won't have much of a military career doing that. The most a good leader can do is to intercede for his people, and try to prevent their lives from being wasted stupidly. Finally, on a very minor note, but one that made me very nervous (as I was there for accuracy), a LOT of liberties were taken with the history of the war and the 196th Light Infantry Brigade, and with the physical geography of Vietnam.