This is just my take on what I believe is driving Dish's move. I could be wrong, but this scenario makes the most sense to me:
I think this is a very shrewd business move by Dish. This isn't just about WWE. This is about the streaming direct to consumer model.
WWE is offering all their content for $120 per year. As Scott mentioned, die hard fans that order the PPVs that can access the streaming channel via broadband will do so. Meanwhile, the Satco subs that don't have the broadband access must rely of traditional PPV model. Those fans will make WWE a lot more money just because of the pricing difference.
Dish doesn't want WWE's streaming direct to consumer model to succeed. If it does, it will only encourage other content creators to do the same and leave Dish, the middle man, out in the cold looking in. So by cutting off PPV revenue from the subset of fans most likely to still pay full price, Dish is greatly reducing WWE's PPV revenue, which may lead them to adjust monthly pricing (making the internet streaming subscription less attractive to some) or to abandon it altogether.
If Dish maintained the status quo and the WWE prove their content delivery model to be successful, the future harm to Dish from other content providers copying the WWE model is incalculable. So Dish is foregoing current shared PPV revenue now in the hopes of hampering WWE's success as a direct to consumer streamer. Hopefully, from Dish's perspective, WWE having difficulties with maintaining revenue under this new model will deter or delay others from adopting the same model and protect Dish's position in the marketplace.
It sucks for subs that are WWE fans and can't see their PPVs because of it, but I'm not convinced that this is a bad move on Dish's part (from a longer term business perspective).