I think that it's likely that the contract might not have been renewed because of the label (they have been on a downward spiral for a while from what I gather, and the boyband market is getting new fresher additions, so that won't help) -which would mean that they have been "dropped" if we want to use that expression.
But the truth is we don't know.
They have had a great run to last 4 albums if I read right, it's quite an achievement, and I don't think anybody was not recognizing that...
They maybe could have been signed by another label (whether they were dropped or it was totally their choice to not renew the contract), but I think that they made the right decision...
I think that everyone more or less agrees with oneanother on this thread, it's probably more a question of angle and tone.
And of course this will happen to 1D, LM, UJ, Olly at some point. It's not as if it's a new phenomenom that pop acts fade away and aren't signed back or are let go. It's always sad for the fans, but so very few singers manage to stay relevant for more than a few years -not to mention how much truer it is for boy & girlbands.