I imagine it's getting a lot harder to justify support of the VTT with a number of other groups working on similar projects (Roll20, Tabletop Forge, Maptool, etc.) and the D&D VTT's primary draws (4e tool integration) with an uncertain lifespan due to the edition transition.
If that's what they thought was the primary draw of the VTT, then they were mistaken. The great advantage they had, and that they should have leveraged, was that installer base of 80k+ DDI subscribers. Using that, the VTT, and good software to put people in touch, it should have been possible for them to get to a point that any person could go online at any time, and within 30 minutes have a group assembled to play D&D.
And, the great benefit of that is that it becomes ever-more valuable as the DDI subscriber base increases - the more people join, the more incentive there is to join, because the easier it makes it to assemble that group.
4e integration should absolutely have been one of the features of the 'official' VTT. But it's the community that was the competitive edge.
They're probably consolidating what they have in order to focus on starting fresh with 5e - all the other tools are established; the VTT is the only one that wasn't finalized.
Ironically, the VTT is also the one that was easy to repurpose for 5e. If character design is significantly different (as it appears to be), the Character Builder will need redone. If monster design is significantly different (again, as it appears to be), the Monster Builder will need redone. The Compedium will be easier to repurpose, but there will still be a massive
data-entry task to be done.
I'm now waiting for the other shoe to drop: WotC's announcement that there will be no
5e version of the DDI. I would expect the magazines to go "free to view" (but also a shadow of even their current selves), that the 4e tools will continue unchanged (but receive only minimal ongoing support... and only for as long as the existing DDI base remains large enough for them to be profitable), but that there will not be any further tool development.