Did your faction go to war with the faction who owned the city? When that happens you lose the workshop. Unsure if that's by design.
Personally, I wouldn't mind if the workshop was down altogether in case of being located in a town belonging to a faction we're at war with, but at two conditions;In warband your shop was merely sequestered, in bannerlord it looks like you lose it altogether. Bug or not, this needs to go back to the warband system.
They are a lowly rewarding and costly investment for now, but the devs are already aware that they need to be rebalanced.My smitty in Marunath was changed into a wool weavery owned by no one. Now that it is safely in Vlandian hands I felt it was safe to reopen. Shops being destroyed simply makes them a worse investment than they already were.