The F117 shrunk the detection range of the mostly Soviet and French made defense radars in Iraq to the point where it was no longer an "integrated" defense network. The circles of detection range shrunk enough to make huge gaps in what was prior to the F117 being around, an overlapping defensive grid. I've heard some of the pilots say that the mission planning and route following system etc of the F117 was also a huge part of its success, being able to accurately penetrate through these gaps in radar and defense coverage.
Considering the sheer number of radars, and they high quality of these systems at the time, the F117 performed in a most stellar fashion in 1991, and continued to do so many years after that, only losing one, and another taking a close near miss in the Kosovo theater ops area. Just looking at the tiny fraction of aircraft sorties the F117 made up, and the huge numbers of high value targets that it took out, it's ridiculous to say anything against it. One loss compared to how many hundreds, no make that thousands of targets eliminated?
As others have pointed out, it was only retired due to the F22 and F35 being several orders of magnitude (apparently) less observable, in addition to also being true "fighters", something the F117 was not. The cost of maintaining a platform that was now easily outclassed by newer aircraft is pointless in these times of $ crunch.
Barret Tillman wrote an interesting book called "Warriors" back in 1991 or so. He was a fighter pilot, from the F8 Crusader community, one of the last "gunfighters", and being from that community, he was of the opinion that radar, ecm, all that stuff ranked far down the ladder in air to air combat next to a fighters performance so far as thrust/weight ratio, acceleration, turn rate/radius, visibility (size/eyeball, not RCS), simplicity (sorties per day possibly generated), and a good cannon and heat seeking armament. He wrote that radar missiles, even the fancy ones like the Amraam/Adder/AAM4/Etc, were mainly used to gain a better position or deny the enemy one, and that most of the killing even in the advanced age of stealth, radar, ecm, and fire and forget radar missiles, would always be done with heat seeking missiles and cannon. He felt that radar, ecm, stealth, all that electronic warfare related stuff would just end up cancelling each other out, and it would come down to eyeballs, seat of the pants, and heat seeker/cannon fights because of that. It's an interesting take, like I said, it was 20 years ago he wrote the book, but he's spoken about this issue many times, and even today still feels it is somewhat a valid opinion. Google some of it if anyone is interested, or check out the book, he builds an entire Air Force for a rich Arab state out of F20 Tigersharks, and most of them don't even have radar installed due to his beliefs and policy, which he weaves into the novel. I don't necessarily subscribe to all his idea, but as I said, they are interesting, and based on his experience, I can see why he thinks that way - Fighter Mafia on steroids more or less.
