This shutdown is most likely in direct response to Kabam announcing a new focus on developing strategy games similar to their game Kingdoms of Camelot. Recently, Watercooler had released their first strategy game in Dragons of Atlantis, and both companies had enough similarities that it made sense for them to work together. Tattoo City, being a more whimsical shop-owning game, did not fit the company's new direction towards hardcore games for new social game audiences.
Tattoo City peaked at an all-time high of 2.8 million MAU, and currently has 1.8 million. This is a respectable number that many games strive to achieve, but the game only has a daily active playerbase of around 40,000 which puts their DAU/MAU around 3. Good games are generally around 30. Clearly Tattoo City wasn't retaining players, which means it is unlikely that the game was bringing in enough revenue to justify having it around.
Want to check out Tattoo City before it closes? Play it on Facebook before it closes on December 1st.