The official reason that the Pave Low got canned was high MX costs and old technology. Talking to former pilots and crew, the reason was the Army. Since the 1980's when the Pave Low transferred to AFSOC, the Army wanted it. They made the case that special ops was their business with the SOAR but the AF was able to make justifications to keep it so it stayed. Finally in 05-06ish the Army brass was able to pull enough clot to retire it.
Hearsay, but considering the last of the Pave Low IV mods were done in the late 90's, it was still a very capable platform.