Nintendo hasn't said anything about why they're canceling Splatfests. So currently, anything is just mere rumor and speculation. Even the Japanese Twitter hasn't explained why they're choosing to stop them. It could be that they're gearing up for Splatoon's sequel or that the Splatfests were just too much of a strain on the servers. At worse, it could be that they're giving up on Splatoon but it's extremely doubtful that they'd give up on a game they're still currently investing a lot of money into.
It's mostly just best to wait for Nintendo to explain themselves so we don't spread any sort of rumors. :) For now~ We should try to just enjoy the last Splatfest. c: