Straight from the creator's Facebook. It's going on hiatus from TV, but they're planning on continuing it online. Whether that means its own website, or Nick.com, we don't know, but Korra will continue with this season, at the very least.
The blame falls on all parties involved. Nick did a terrible job advertising the show. The leaks certainly didn't help anything, because it's pretty much what caused the creators to say "You know what? ******** it, we're not putting the episodes on Nick.com then." And then they were super slow about uploading them to iTunes, so the only way to really see them was on TV one night a week, and there are countries that don't have Nickelodeon, so the only way to see them online LEGALLY was iTunes, which, as aforementioned, was being uploaded at snail speeds.
Honestly, I hope Avatar strips itself from Nick entirely and continues just putting episodes online or goes to a different channel. There are plenty of mature themes that could be implemented while still keeping it fairly "kid-friendly".