The history of mathematics over the last 200 years has many occasions when the fundamental assumptions of an area have been shown to be flawed, or even wrong. Yet I cannot think of any examples where, as the result the mathematics itself had to be thrown out. Old results might need a new assumption or two. Certainly the rewritten assumptions often allow wonderful new results, but have we actually lost anything?
Note I would like to rule out the case where an area has been rendered unimportant by the development of different techniques. In that case the results still hold, but are no longer as interesting.
I wrote up a longer version of this question with a look at a little of the history:
http://maxwelldemon.com/2012/05/09/have-we-ever-lost-mathematics/
Edit in response to comments
My thinking was about results that have been undermined from below. @J.J Green's example in the comments of Italian algebraic geometry seems like the best example I have seen. The trisection and individually wrong results do not seem to grow into areas, but certainly I would find interesting any example where a flawed result had built a small industry before it was found to be wrong. I am fascinated by mathematics that has been overlooked and rediscovered (ancient and modern) but that is perhaps a different question.
Best Answer
Hilbert's $16^{\rm th}$ problem.
In 1923 Dulac "proved" that every polynomial vector field in the plane has finitely many cycles [D]. In 1955-57 Petrovskii and Landis "gave" bounds for the number of such cycles depending only on the degree of the polynomial [PL1], [PL2].
Coming from Hilbert, and being so central to Dynamical Systems developments, this work certainly "built a small industry". However, Novikov and Ilyashenko disproved [PL1] in the 60's, and later, in 1982, Ilyashenko found a serious gap in [D]. Thus, after 60 years the stat-of-the-art in that area was back almost to zero (except of course, people now had new tools and conjectures, and a better understanding of the problem!).
See Centennial History of Hilbert's 16th Problem (citations above are from there) which gives an excellent overview of the problem, its history, and what is currently known. In particular, the diagram in page 303 summarizes very well the ups and downs described above, and is a good candidate for a great mathematical figure.