I am always fascinated by this topic and see many threads on this issue on this board. My spouse has been a manager of 2 different Walmart stores and they are NOT "all about the community" - that is marketing hype.
Walmart has done an excellent job of marketing, even down to giving titles to their employees. For example, "greeters" are not there to say hello as the title would make you think - they are supposed to be there to 1) make sure carts are ready for you to take in the store so you buy more and 2) to make sure you don't walk out without paying. Yes, the nice greeter actually is a marketing and security person.
Stores have little say on what merchandise they get - that is dictated by corporate offices in Bentonville. when our local store ran out of popcorn poppers in January they were told they couldn't get more because corporate Walmart says they are a seasonal gift item. Walmart is constantly changing what comes into the stores from year to year and customers complain all the time about not being able to find something they used to get at Walmart. Even complaints by the manager to corporate get nowhere.
Getting rid of bolt fabric is about staff time and space. Walmart's biggest flexible expense is employee salaries so not having to have someone cut fabric is a real cost savings. Walmart also is starting to downsize its new supercenters by 20-40,000 sq feet, which will leave little room for bolt fabric that isn't high dollar/high profit.