My experience is that most LBSs don't carry a very good selection of 27" tires, but many have something basic in stock, like a Kenda K35.
As far as what happened... 27" wheels have a bead seat diameter of 630mm, while 700c wheels have a bead seat diameter of 622mm. They're almost exactly the same size, so it's awkward for a market to sustain good support for both. The USA used to use 27" as its standard road bike wheel size, but 700c started to encroach in the late 1970s. 700c has the same brake track location as road tubulars, and it was marketed as a more "performance-oriented" size; it was also sold with a greater focus on hooked rims to provide good bead security for narrower and more lightly-constructed tires at higher pressures. Over the course of the 1980s, 700c took over.
The reason that bike shops don't carry more 27" wheels and tires is that the size has been dead on new bikes for a few decades.
There are still some reasonable tires available in 27", like Paselas. And most bikes with 27" wheels can be swapped to 700c wheels, if desired: it just requires moving the brake pads downward by 4mm.