Just because "hey, I see full flights, therefore the airline is making a mistake" doesn't mean you know the whole picture. You said that you are not sure about the reasoning. There probably is some reasoning that isn't easily discernible just from your experience of walking onto a plane, seeing full seats, and buying tickets regularly. Airlines usually have good reasons to terminate service, and they involve making more money elsewhere.

Oh, and at least one point this winter, I saw SEA-FAT on the Alaska "special discount" page for pretty cheap.