What causes NFC on Nexus 4 to stop working?
Looks like this might be hardware, but not broken hardware.

EDIT: See comments below, but I suspect this is actually the tag hardware I was using and not the phone hardware causing the problem.

This appears to be a design flaw with the nexus 4 and I would absolutely love to hear from any other nexus 4 owners who use NFC tags.

I managed to get it to work consistently with some tags at home (i.e. not broken hardware). The only tags I can get to work though are "sticker" tags. The other tags I have are wrapped in some kind of hard plastic enamel to protect them from damage and allow you to carry them on a keychain etc... (also some which are specially designed to work near metal and other sources of interference, they did not work, I assume because they are also thicker than paper).

Any NFC tag that was made of the thicker plastic (i.e. not a pure sticker) would not scan, I am thinking this has to do with range. I could get them to scan somewhat inconsistently so I know the tags were ok (also tested on other phone). They also scanned better when I removed the back cover, but this cover is literally 1mm thick. Maybe 1.5mm. It's a Ringke Slim. So I have to conclude there is something internal to the Nexus 4 that is ruining the range. Seems like a massive oversight, but what other conclusion can you draw from the results I have so far?

Will update if I learn more.

Does anyone have a nexus 4 and use a thicker NFC tag (basically anything that is not paper thin)? If so, let me know, otherwise I'll accept this answer in a few days.