I’m curious as to why you think this. Shows as popular as Lost has been very rarely dry up and blow away, cancelled in mid-season. I can’t think of a single established serial dramatic series cancelled in the middle of a season other than its first. If the ratings begin to dip - almost certainly they won’t next year, but they might in the following season - and the show is going to be cancelled, ABC would inform the producers of this plan before the last batch of episodes for that season were filmed, then cancel the show after Season 5. This would give the writers and producers time to cobble together an ending, if not the one they had in mind.
That said, I’ll gladly place a wager that, having made this announcement, ABC will not cancel Lost until the end of the sixth season (ie, when the creators end the show as planned). In fact, I’ll bet that, during that season, we’ll hear rumors that ABC is trying to convince the show’s producers to do another year. The show is simply not doing poorly enough to be cancelled, and is unlikely to slip that far in such a short time frame.
Regarding the issue of viewership for the long run, I can only say one thing: I’m not Nostradamus.
Maybe viewership will tank, maybe it won’t. Right now the press is all over the idea that ratings are down from season one. But is this really news? Don’t most shows drop off by the third season?
So what does the future hold? Who knows. The only real question, as far as I’m concerned is this: Can the producers wrap up the story. I figure they probably can. Maybe next season turns out badly and they decide to only do one more season and not two. Maybe they decide to end production in the middle of the season, but give the producers enough lead time to produce the last three of four episodes with an end in mind. Maybe a season ends without renewal and the producers ask to do a couple of two-hour movies to wrap things up. Heck, maybe all the answers are contained in a DVD supplement for the final season or released on the web.
Some of these possibilites are less satisfying than others, but the producers now know how to get to the end. All that remains is to see how that information is presented to us. I hope it will be in the form of 48 episodes over 3 seasons. But if that’s not the case, I’m fairly confident that I’ll get it somehow.