I think it's unlikely that the property set isn't being used. My guess is that either you changed a critical property in the property set to some invalid value, or a MODX core file related to property sets got corrupted when installing the site.
One quick test that might help diagnose things is to create a new property set on the Properties tab when editing the FormIt snippet, but don't add any properties to it except one new "fake" property that FormIt has never heard of. Creating it there will automatically attach the property set to Formit. Then try FormIt with that property set specified in the tag.
If FormIt doesn't work, something is probably wrong with MODX. If FormIt works, you can try changing the property values one-by-one and see if it's still working after each change.