Kinda sucks for me, as I've almost exclusively used gift cards for the last few years. I get a bonus tax-free credit card by my employer, which I can only use at retail stores. So those were a great way for me to use that card to buy games. It was also a good option for people who wanted to avoid payment providers like Visa/Mastercard etc. Oh well.
Its almost certainly part of the ongoing lawsuit Valve is having with New York.
NY AG claims (among other things) that Valve knows their Steam Wallets and Steam Items and giftcards form part of a system which allow the proceeds of alleged gambling to be converted into real world money, and that Valve doesn't do enough to stop this.
Valve claims they do their best to find and shutdown secondary markets (which are against their TOS) that facilitate that, and well now they're just pulling the plug on another part of that loop, where all of it has to exist for all of NY AG's claims to be true.