I love my walmart and I dread the loss of the fabric department! We live 25 miles away from the nearest Joanns, and I don't know WHERE the nearest quilt store it!
In terms of business practicality, it makes sense to close it. It's not just the sales but the fact that you need a worker dedicated to that department. They have to staff that one small area with people who know fabric and crafts and can cut the fabric (late at night, they sent over a guy from Automotive to cut for me once... he did his best.) So I hate to see it go, but I don't really blame them. Employees are very expensive.