It is a "double-edge" blade as to corporate costs vs customer satisfaction which in turn, can greatly enhance the companies repeat business.
The business I am in (high pressure water pumps) ships around 2500 to 3000 units domestically in USA every year. Installed and operated correctly these things have a design life cycle of about 5 - 7 years due to the extremely rough duty. Our customers down time due to pump failure keeps all service and warranty departments on their toes. If it were not for the multiple "factory trained and authorized" network of shops we have around the country, we would have to add hundreds of employees and probably cover some freight costs too.
So we invest in training schools, seminars, at the service techs shops, give a generous discount on those non-warranties where parts are needed for repair, control the outside repair labor costs so no gouging goes on, and annually inspect and re-authorize new people to make sure everyone stays on the same page so to speak.
I think S & W would increase customer satisfaction if they had a similar program of "authorized and trained" smiths around the country, and then back them up when true warranty cases arise, or give equal "factory trained" service when charging money.
I can't believe that all S & W service shops, or smiths, were causing trouble or issues enough to cancel the whole organization with one stroke of a pen (or e-mail for the modern crowd).
I agree with the OP......sad day.