I feel like House is one of those shows that could continue forever. Why was it cancelled?
Long story short, because of money.
According to this article Universal TV wanted to produce a new season but Fox network was spending $5 million per episode and wanted a cut in the show's license before renewing. They couldn't agree on an amount.
"Universal came off as aggressive," one exec says. "It was such a big gap that [Fox] didn't pursue the discussions." Universal insiders say the studio was surprised by the decision and had been willing to work out a compromise.
After that there were some budget cuts, but the negotiations were dragged for too long and Fox had other shows performing well enough to let House go.
Fox execs and (David) Shore (executive producer) agreed to wrap things up, and on February 8, the cast and crew were informed. By then, Shore had made his peace with the decision. "He was interested in another year," says an insider. "But he wanted to go out as strong as possible."