According to tourism chiefs, the cost of cancelling last weekend's event will run into millions of pounds, and show bosses will now meet with sponsors to discuss whether the event will return next year.
Organisers called off the three-day event, which was expected to attract 60,000 visitors, on Friday morning after heavy rains battered the show's new site at Myerscough during the week.
As vehicles arrived to set up on Thursday, conditions deteriorated further and following health and safety assessments and a review of the weather forecast it was decided to close the showground to the public for Friday only.
Later that morning, with the rain continuing to fall, a decision was made to cancel Saturday and Sunday as well.
Chairman Gordon Roberts said: "We are obviously extremely upset and disappointed for the traders, exhibitors, competitors and everyone who has worked so hard and supported the show. The team are devastated that the weather has defeated us again this year.
"We've had a lot of very good volunteers here and I feel for them, I feel for the people who have not been able to come to the show.
"We need to talk to everyone who has helped us in the past and get their views on how they see the future."
Last year, the event due to be held at Ribchester was cancelled due to bad weather, but weeks of rain meant that organisers knew in advance that it would not go ahead, and Mr Roberts added that 'lessons need to be learned' from this year's problems.
He continued: "The deluge over Wednesday, Thursday and Friday was just too much for the field to cope with. We will have to look at the layout, whether we need more infrastructure, where we put it and how quickly we can prepare beforehand."
Adrian Marklew, spokesman for the Lancashire and Blackpool tourist board, said: "It is really desperate news. Many local food producers would have had stalls. In terms of an impact several millions of pounds have been lost."
Hugh Evans, director of policy at Lancashire Chamber of Commerce, said the cancellation would be a blow to small businesses selling at the fair.
He added: "This is a huge disappointment. The show's cancellation will hit these businesses hard."
But Wyre Council's Health, Safety and Licensing Manager Malcolm Reece said the council was satisfied that the correct decision had been made 'in view of the extremely poor ground conditions on the site.'
He said that at first, it was hoped that some events, such as the equestrian show, would go ahead, but further bad weather meant it was impossible to continue.
Farmer Andrea Gardner, from Bay Horse, was due to be exhibiting in the sheep classes at the show.
She turned back when she saw motorway signs on Friday saying the show was cancelled.
She said: "It was badly managed. I would have thought they would have known on Thursday morning what the weather was going to be like."
Some stallholders criticised what they called the organisers' lack of foresight in not preparing for bad weather, especially after last year's washout.
One, who asked not to be na med, said: "It is as if they thought the show was next month. Compare it to the Great Eccleston Show which had just as much rain last week but they already had sand and bark down."
Keith McKernan, of the campaign group No2DuchyPark, which has objected to the use of the site for the Royal Lancashire Show, said: "The cancellation of the show in these circumstances is not what we would have sought and we sympathise with the organisers in the time, effort and money they have lost.
"Our issue has never been with the RLS in itself, but with the use of this venue as a showground.
"Apart from the trafffic issues there must now be serious concerns held by the show organisers and the Duchy as to the suitability of the land itself for staging such major events.''
MP Ben Wallace added that the cancellation will leave question marks over the use of the Myerscough site.
He said: "It is a shame Lancashire is not having a show which befits the county."