I agree with it. The cast was getting expensive to keep on, and the show was running out of gas. Season 7 was the worst season of TNG since season 1. A TNG season 8 would have likely been pretty bad. The movies didn't work out as well as the studio hoped, but you can't use that as an argument, since they were basing their decision on the info they had available at the time.
TNG's future appeared brighter on the big screen.