In all honesty though, last year's Winterfest was a disappointment. It didn't get nearly the attendance it had in the late 80's, so I suppose there is a pretty valid reason to cancel. The event was gone for 15 years, and they probably figured (as I did) that the nostalgia would bring a lot of visitors back and unfortunately that just didn't happen. In Winterfest's defense, the 2005 version wasn't quite what I recall from my childhood. I remember a lot more lights and a little more magic to the event back in the day. Paramount just didn't give the event the attention it needed to be great.
Obviously the reason for cancellation is Cedar Fair. They want to get profit up at the Paramount Parks, and anything not really making any profit is on the block. They had zero success with winter celebrations at their parks in the past, so naturally they would balk at attempting Winterfest. I'm not sure I necessarily agree with this step, because a well run winter event can do a park good, but I do understand why they would make the decision at this time. Perhaps this decision will enable them to sink a little more into Fearfest, which has been packing the place and raking in the money every year for quite a while.
Cedar Fair is an expert at getting the people who are in the parks to spend money. Last year Kings Island pulled in more people, but Cedar Point brought in almost double the revenue King's Island made (http://www.thepointol.com/news/2006/103.html). Its not just the fact that no one showed up to Winterfest, its the fact that the people who did show up didn't spend any money.