I imagine what it means is basically, "Before COVID, universities had to collaborate with Udacity to produce these courses and manage course credits/online degrees. Now they realized that they can easily do it themselves (perhaps at the institution level)"

Nah. There was some of that as the tools available to unis improved alongside Udacity, but it was a very intentional choice. The business with GT made $X/year while the consumer & enterprise businesses brought in $20X/year. It seemed like we could maybe double the OMSCS or scale linearly with effort by making more partnerships, meanwhile the other lines scaled faster with much less effort. Terminating this partnership was just one of the business lines that got cut off to focus everything on the lines that were growing much faster.