She had given up.
It was too hard fighting against him, struggling against his power.
Sarah had accepted becoming his queen; she accepted giving her baby brother to him, too weak to continue fighting any longer.
The time he granted her was over, and Jareth claimed Toby as one of his goblins, as he had done many times in the past.
How many babies and kids had he taken away after a silly wish was made?
Enough to fill his kingdom with many trolls and creatures, all turning into goblins after 13 hours went by, if the fools who made such a wish tried taking it back.
Sarah became his, as she was meant to. She never returned to her world, much as Persephone had become Hades' wife, lost from the outside world and trapped in the labyrinth.
Jareth's power continued to grow with each passing year, and eventually, Sarah bore him a child, Melody, who she cherished and he raised to become the next Queen.
Eventually, Melody would find her own Sarah, someone who accepted become her King just as her own mother had accepted her role by Jareth's side.
Jareth had won, and Sarah's parents never saw their children again. The cycle would repeat centuries later, when Melody found the man she desired to marry. She'd win as well, in due time.