The Railfan & Railroad article was very good. Unfortunately, the passenger service just wasn't practical. Driving was quicker, flying was half the price, and the government just said no more. The dinner train (one of the fanciest and best run operations around) was only part still making money, and that was hurt by weak travel post-9/11.
As a more recent update, on May 15, the BC government issued a request for proposals to hand over control of freight service to the private sector. CP has expressed strong interest and would seem to be the most likely candidate.