The ride's water course was to be filled in to make way for the park's new coaster for 2004, Paramount's Great America's former flying Coaster, "Stealth". Originally the park planned to put the giant paddlewheeler on display near the new coaster, but during the move to it's new location, the Boat was damaged when a hole was made in the hull. Wrather than spending a little money to repair the Hole, the park took the cheap way out and decided to remove it all together.
The Carolina Stearnwheeler, which was one of the only attractions still in the park from it's opening in 1973, made it's final cruise back in Mid-August. While not steam operated like the various paddlewheelers at Disney Parks, she was just as grand as the Mark Twain or Liberty Belle and had a beautiful Red, White, and Blue paint scheme. It was a truly unique attraction for a small regional park that never attracts over 1.8 million visitors per season.
It should also be said that this incident is similar to the mis-happs that resulted in the scrapping of WDW's second Stearnwheeler, the Admoral Joe Fowler, which also had a damaged Hull.
However, with the 12-30 age group that most parks aim for today, a slow moving, layed back riverboat could just not survive. Carowinds, shame on you for getting rid of your Heritage. The park will never feel quite the same.
As a guest, I also hate to see it go. It was one of the attractions my senior citizen parents could/would ride. They really don't want to pay the admission price to simply walk around and watch their grandkids.