Hindi goes as well
What I didn't mention in the last post - because I didn't believe it - was that Sanskrit isn't the only course going. Cambridge is also closing the Hindi department. This is something like the fourth most widely-spoken language in the world, 400 million speakers (many more if you include urdu speakers, and speakers of hindi as a second language). How does nobody think it might be useful for somebody to be able to speak this language?
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One of the big problems with academic Sanskrit (outside India) is that people mostly come to it via some other route - generally, Latin and Greek, but sometimes theology. That means they end up with a fairly warped perspective. The advantage of starting on Sanskrit as an undergraduate is that you get the chance to study your subject in itself, not as a spin-off.
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ps. found yr lj via your other blog via Registan. Mind if I add you as a friend?
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I think SOAS has just got the last Hindi lecturer from Cambridge, Francesca Orsini.
The problem with sanskrit/hindi is really at the school level - children don't realise that these courses are even options, so they don't apply. Then there aren't enough students to justify teaching the course.
FWIW. Oxford seems to have a brilliant and thriving Sanskrit department, which will no doubt continue to embed itself as the centre of everything old and south asian.
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On a slightly related note, SOAS advertises all sorts of weird and wonderful languages through its Language Centre programme (essentially evening classes) but actually only holds classes for a handful.
The current government has made all sorts of promises regarding the expansion of language-training, but has yet to deliver on any of them.