I believe the intention of Google Fiber project was not to make money directly, but to put pressure on other ISPs by showing that Google can actually enter the market and act as viable competitor if they don't behave.

For me this sounds like somebody just made a high-level decision that this thing is no longer important for Google's mission. As we have seen, they have been trying quite hard to focus on fewer things. It's not necessarily even about money. Each individual business requires some attention from the (top) management and they are competing on talented people inside the company.