Back in the days when PHL-BOS was a great route for US Airways, that meant that this route has faily high fares. Thus, a slight premium could be attained for a commuter operation on BED-TTN and still cover the costs of operating the flight, and appear to be reasonable.
However, now that we have AirTran on PHL-BOS, Southwest on PHL-PVD/MHT, and GoFares, I am sure the yield on BED-TTN was had declined dramatically, and when combined with the relatively higher CASM of a turboprop, very quickly turns into a situaiton of very high unsustainable loses.
I cannot think of many markets where turbo-props compete successfully with LCC's. Even considering the convenience factor.
I am making up these numbers, but... If a walk-up PHL-BOS used to be $500, and walk-up DEN-TTN was $600, that was probably sustainable. Now, walk-up PHX-BOS is in the range of $100 or less, and well, that means BED-TTN must come down, however, the expenses do not, and there is no "hub traffic" trick that can be pulled (substituing higher yield connections for ultra-low yield locals).
This is not surprising... The only surprise is the amount of time between the announcement and the service cancelation (i.e. none).