Competition is part of the reason they keep canceling stuff, in a weird way.

Let's say they did 3 more seasons of Santa Clarita Diet. What does that give them, in terms of stocking their virtual shelves? Not much, actually. One season or 10 seasons of a show provides exactly one show to list among their offerings. So let's imagine that with x amount of dollars, Netflix is going to fund 20 seasons. They put that into 2 shows (10 seasons apiece), they now have 2 shows to advertise. Or, they put it into 20 different shows (1 season apiece), they now have 20 different shows to advertise.

Of course, it isn't that simple -- if people like certain programs, they want to offer more of those shows to retain customers, though each time they bring a show back, it usually gets a little more expensive to pay all the people that are now an integral part of the show. So there is a certain balancing act. But after a few seasons, unless it's something rampantly popular like Stranger Things or Grace and Frankie (or something that's just inexpensive to maintain), there's often more financial benefit to putting their money into new programs than to keep renewing their moderately popular shows.

You said it yourself: they need to pump out content. They want viewers to see lots of stuff when they browse Netflix, and the problem is that more seasons of a show don't visbibly provide "more content" as much as simply having more shows in their catalog. For a current viewer of a given show, it sucks, but for a customer browsing Netflix, seeing a show with 30 episodes vs 40 episodes doesn't really make much difference.

I'm really curious to see how this strategy plays out over the next few years.