The ending of Psych was pretty much forced by USA Network. It probably wouldn't make sense to bring it back though.
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Yeah the series was going downhill at that point.
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A lot of that had to do with the network. I still wonder what happened with the writers though. Seasons 1-6 were all amazing, but then Season 7, with the exception of a few episodes, really wasn't even good, let alone amazing. So many episodes were just plain bizarre, and it was like they were trying to make the show more adult for some reason (one of the things I appreciate the most about Psych is that it was so good while also being mostly family friendly). Season 8 was a little bit better, but the show really didn't have the same magic it had had for so long until the series finale. Still miss it though.