You all make valid points, some I agree with and some I don't. LU is closing because Lego wants their customers buying Lego and not playing with it in a virtual world. Mt's point on this being similar to the LDD crisis is only partly correct. But still, both reasons stem from the almighty dollar.
Perhaps Lego speaks the truth when they say LU's turnout was disappointing. Perhaps Design By Me is the opposite, turnout to buy a model you designed may have been overwhelming for them, can you imagine the cost of each set, trust me, the high price of DBM still didn't make them a dime.
But hey, we are all die-hard here and from the looks of it, we will be until you-know-what freezes over, remember, when Lego closes a door, they always open a window or three...
A companies policy is basically to make as much money as morally (and sometimes immorally) possible. Thus, if LU was making money, they would keep it.