Why does the lady of shallot die?

First, it's "Shalott." She ain't an onion! Second, she dies because there is a "curse on her if she stay [stop weaving] to look down to Camelot." She looks out the window at Lancelot, who represents Camelot, also sees Camelot beyond him, and falls hopelessly in love with him--symbolically with the ideal of Camelot. Not a good thing for an artist to do--fall in love with the ideal of her age, since that ideal (Lancelot, in particular) is a contradictory and destructive force despite his good intentions. Tennyson's warning to be critical of the ideology of the age--a warning he didn't follow too well in the suck-up intro to Idylls of the King and elsewhere.