As I pointed out elsewhere, it didn't have to be a binary decision.
There are many periodicals that have both print and electronic forms- Guitar Player (circulation est. 140k in 2002) and all of its sister publications (Bass Player, etc.); The Economist (circulation est. 1m weekly); the NY Times & the New Orleans Times-Picayune, to name a few. Some of the online sites have more content than the print versions, none have less.
WotC could have continued its partnership with Paizo to produce 2 magazines with an apparently upward sales/subscription trend and launched the online versions without cancellation. Then they could have compared subscription trends (online vs print) and made a decision from there. The additional costs of running an e-zine version of an already profitable magazine (esp. without paying for additional material) are negligible.
Instead, WotC chose to simply drop the 2 titles.
By doing so, they may get more subscribers, but I doubt it. Indeed, the precipitous nature of the decision may alienate enough people that, despite better profit margins, the e-zine may not pull any more actual profit than the print version due to fewer actual subscribers. They certainly alienated me.
People look at that circulation of 40-50k out of 5m estimated players worldwide and think that this is bad. I see decent market penetration for a periodical, the nature of which is shared & archived.
And as for the oft mentioned Pyramid magazine's transition to digital- I, for one, didn't join that changeover either. Once it dissapeared from the game-store shelves, it dissapeared from my "read me" list.