Well currently they sell these games for 5 bucks a pop with zero physical media. I'm pretty sure they were aware of the demand, they just want to sell games for 5 bucks a pop with next to no overhead rather than 2 bucks a pop on the NES Classic minus the costs involved with the manufacturing and distribution.
Don't get me wrong, I'm pretty mad that they stopped production as well, but one thing I've learned over the years is that Nintendo usually knows what they are doing. A year or two from now it'll make perfect sense as to why they ceased production.