On one hand, the news wasn't unexpected - CQC was never very popular and if dropping Arena from Steam will save Frontier a few dollars, then that's a few dollars that can be used elsewhere.
On the other hand, it's unfortunate that there doesn't seem to have been any investment in CQC since its launch. Considerable expense was required to create it, and all that went to waste because it was hamstrung by bad matchmaking. As others have pointed out, all it would take is some bots and better matchmaking and it would already be a far superior game to what it is now (practically unplayable).