I travelled on the Thello about ten times in the 2014/5 period, mostly on business. It was a mediocre experience. Hopelessly unpunctual (only one eastbound, and no westbound, journeys arriving within 30 mins. of scheduled time; up to two and a half hours late), dining car attached hit and miss, staff arguing with each other, some carriages past their prime. I saw no other people looking like they were travelling on business. Most days there were quite a lot of people travelling in the couchette cars, and a fair few in the Sleepers, but the fares were not expensive. Every westbound trip, the non-white passengers were scrutinised by French immigration during a long stop at Modane, causing disturbance and delay.
Looking at the operating practices (separate Thello liveried loco to bring the stock from sidings into the Gare du Lyon, separate loco for the Milan to Venice section; booked to travel via Brig but mostly actually via Modane) , plus the 'delay repay' from the unpunctuality [I had lots of money back!], and the cheapish fares, I can't see how it can possibly have been on the edge of viability. The train had all the hallmarks of why Sleeper services across Europe were fading away.
Whilst there will be some to whom a private compartment will appeal, there wont be many who are prepared to pay the economic rate for such a facility. Far from Trenitalia being short-sighted, they are taking the pragmatic decision to get out of this loss making business which has no realistic hope of viability.