Sci-Fi cancelled SG-1 for 2 reasons:
- Declining ratings.
- To give MGM the finger.
MGM have been steadily jacking up the licensing fees while reducing the show's quality, which - combined with lower ratings - has vastly reduced the profitability of the show. But Sci-Fi also own the rights to air any potential 11th season, meaning they've got MGM in a choke-hold.
The Stargate franchise as a whole will take a huge hit if MGM are unable to produce SG-1 as their flagship series. So by cancelling the show, Sci-Fi are forcing MGM to either lower their licensing rates or cripple the show.
And, to Sci-Fi, it doesn't matter which of the two MGM chooses. They can't make a profit at the current rates anyway, so they might as well not air the show. But by threatening the franchise as a whole they're engaging in a game of chicken with MGM over the rights where the only two outcomes are the loss of an unprofitable show or the continuation of it at more profitable rates.