There had been some rumors a number of months back that Valve might be working on a new Steam Controller, based on a patent application filed by Valve for the backside of a similar-looking controller, only with pressure-sensitive grip buttons, a bit like what the Index controllers have. Additionally, it had since been found that the Steamworks SDK files now include some lines referencing a "SteamController V2", with pressure readings for those grip buttons, in addition to pressure readings for the shoulder buttons and trackpads, which are not available for the existing Steam Controller. It's very possible that might be part of a wider revamp of the controller's design.
The Steam Controller has been out for four years now, so a refresh wouldn't be surprising at this point. That might also explain why they are clearing out stock at a low price, rather than simply putting them at a more moderate sale price and keeping them around a while longer until the inventory naturally runs out. It probably wouldn't make much sense for them to sell the existing model alongside a new, improved one, after all.
So, I wouldn't say that they are necessarily "killing" the Steam controller, as there are indications that we might be seeing a new one to replace the existing model. The idea behind the controller seems fine, even if it's not exactly the best input method for all games. Valve could do some things to address that with a redesign though.
Experience a new level of precise control for your favorite games. The Steam Controller lets you play your entire collection of Steam games on your TV—even the ones designed without controller support in mind.