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I think what is really different about this scenario is that it isn't really about letting go of one family because you like another family better or taking sides, etc. It totally has to do with whether you are going to do part time or school age care anymore or if you are only going to take preschoolers and younger. The reason for letting them go is because of the change in direction and the need for financial stability this situation is not able to give.
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I am in the same boat, I had agreed to take one of my dc kids afterschool when she started Primary, but now, 2 years later, I have decided not to offer B/A school care. I love her and her whole family, and she is a best friend of my daughter's so of course it will be hard to do, but as the other ladies have said, we need to put those personal feelings aside. I am going to give notice in Sept that this is the last year for her.