The Washington Diplomats, 7, expired yesterday after a long illness. The cause of death was the impatience of their former owner, Madison Square Garden Corp., and a lack of local investors willing to risk their money to save the team.

Clinically dead for two weeks, the Dips passed away when Steve Danzansky, team president, failed to make a proposal to North American Soccer League owners to revive the team because he could not put together the financial backing necessary to resuscitate the club.

The Dips had been kept alive artificially for two weeks by extensions granted by the league. The respirator was turned off yesterday after a two-week effort during which more than 5,000 people pledged to buy season tickets next spring, in an attempt to convince potential buyers that the Dips were a worthwhile investment.

Thus, 10 weeks after Washington hosted Soccer Bowl '80 and put 50,000 fans into RFK Stadium for a game between two out-of-town teams, the area is without professional soccer. The city that NASL Commissioner Phil Woosnam labeled "our biggest success story this year" has no team, three months after it averaged 19,205 fans per home game, a 65 percent increase over 1979.

Danzansky has scheduled a "thank-you" party tonight at RFK Stadium for the Diplomat staff and fan club. It will be a wake. The Diplomats will be toasted, the good times will be remembered and there will be cheer all around. Mostly, though, the guests will ask each other, "How could this have happened."

It happened because Madison Square Garden Corp. wanted out of soccer after $6 million in losses during two years of ownership. And it happened because Danzansky didn't have time to round up backers who could put up $3 million to purchase and operate a NASL franchise here in 1981.

"Everyone who was interested wanted more time to study the situation more closely," Danzansky said. "You can't blame them. I wouldn't want to make an investment like that without feeling totally confident about what I was doing, without knowing exactly what it was I was getting into.

"The two extensions helped but unfortunately they weren't quite enough.

"Right now, I'm looking to next year. I certainly hope we'll have soccer back here in 1982. I'm convinced this is an excellent soccer town and I think everyone knows that."

Woosnam, wanting desperately to keep Washington in the league because of its prestige and success, tried nonstop for three weeks to help Danzansky convince investors to buy in.

"I'm very disappointed this happened," Woosnam said yesterday. "I just can't understand it. The potential in Washington is so great. I certainly want Washington to have a franchise in 1982 and I think we have to begin working straightaway to get that done.

"The mood in the league is against expansion right now but Washington will be at the top of the list for relocation. We all want soccer in Washington very much. This shouldn't have happened."

Because it did, Woosnam's league has lost its No. 5 franchise in attendance; its No. 2 franchise in prestige and perhaps Johan Cruyff, who is the property of the Cosmos now but will probably not play in the NASL next season.

Around the league, reaction, even knowing the death was coming, was one of shock. "This league can't afford to have this happen," said Terry Hanson, Atlanta Chief vice president. "This is a black mark for all of us. It's a black day for the league."