You have some good point, but I’m not sure if you’re correct about this situation. If I understand this correctly, Medium funded “P.S. I Love You” as in they provided funding to pay the editors and possibly some other staff. Those folks have been receiving salaries (or paid as per their contracts with the editor and chief of the pub). Medium refusing to fund them equals to “regular” employer telling employees they no longer have jobs because the company has no money or decided to defund their department.
Why would people who practically had full- or part-time jobs keep the publication going? Sure, if they love Medium and they are enthusiastic about it, they may choose to do so. But the chances are, all of them have expenses to take care of, and they need stable jobs to replace the ones Medium took away.
I agree with your idea of trying to make it on their own. I’m 100% sure if P.S. I Love You started a Patreon page, they would get a ton of funding. We all love them, and I would contribute for sure, even if it was $5. They can also launch several initiatives, such as online courses related to relationships, digital products, etc.
But it takes time. They may not have that time, as they need income to come in. After all, we’re in a pandemic. It would be awesome if the editors decided to keep the pub alive, but I’m not sure it’s possible.