It's certainly sad news for fans of indepedent comic books as that already-small market is drying up even further. I know I enjoy reading something other than super hero stories and movie pitches, which is the alternative SLG offered.
I began reading SLG with Jim Rugg's hilarious Street Angel, which enjoyed only six issues despite massive acclaim on the internet. Shortly after Street Angel's end, SLG began publishing James Turner's Rex Libris, which offered a similar sense of humour which was right in my wheelhouse; it wasn't until Rex finished its 13 issue run that I began to have concerns about SLG - Turner's follow-up book, Warlord of Io, printed only one issue thanks to the comic book marketplace's indifference to its existence. Io became an electronic comic book, then a trade paperback, but the trade was the only place to get the entire story - a little frustrating for fans like me, who were trying to collect it as it came out (and so wound up with anywhere from 2-3 copies of the installments in separate formats).
Sadly, SLG doesn't seem to be making waves in the electronic format - evidently their best-selling ecomic has sold only 200 copies! I've tried to support other SLG books, but independent comics are, by their nature, against the grain. Comic fans complain about how homogenous Marvel/DC/Archie content can be, but it at least locks in an audience who are willing to sample multiple titles - that is, if you can sell Avengers to a reader, you might induce him to try Herc, Deadpool or X-23.
So, despite my goodwill toward SLG and a concerted effort at buying SLG material, I haven't gone far beyond Rugg & Turner's works - I read a decent trade called Midnight Sun and tried to collect Captain Blood: Odyssey (I still don't know if I have all the issues which were published) and the Royal Historian of Oz (the last issue was cancelled but made available electronically; I'm still smarting over the Io matter, but I'll get to it eventually).
I wish SLG well and hope they hang in there, but retreating from the single issue format makes it even less likely that I'll be paying attention to their publications - it means I'll have to go browse their less-than-ideal online store, when I much prefer getting my comic books from a shop.