Speaking as somebody who has seen what sort of things can happen in campus politics, I see three reasons for what is going on.
1) The department of CS has become... clogged... with under-performing faculty..
2) The administration is playing a brinkmanship game with those above them.
3) The administration is incompetent.
Now, I've listed these in order of most likely to least likely. The administration could be incompetent, but do you really believe anyone could be that stupid? There may be a lot of liberal arts majors, but those are the money sinks; the smart money on alumni donations is still engineers, doctors, and lawyers. Rather than the administration being stupid, there are other explanations, which are far more likely.
They could be playing a political brinkmanship game. I wouldn't be surprised if the plan to close the CS department is just a threat, and nothing more. It would make sense; in a time of mild to moderate budget crisis, it is not uncommon to threaten to cut something popular in order to garner more money for other things. If the threat was to cancel the history department, would there be a big stink? Absolutely not (unless there are a bunch of history buffs in the state senate... who knows? Maybe sports psychology, or sociology, or some other useles.... I meant, less practical... major).
It is very unfortunate, but I think that the most likely reason for this is that the faculty in the CS department are not up to snuff. It could well be that they are, collectively, getting older and tireder, and just not putting the effort into teaching that they could be. It could also be that they just weren't that good to begin with. But, what I think may be the case, is that the CS department is populated by... faculty from an older time. Faculty who, when they were hired, it was a rock solid CV if they had a single top-tier publication. When they got tenure, a solid case had 1 top tier publication plus a smattering of lesser accomplishments. WWU's faculty could think a wonderful accomplishment is a single pub a year.
That is to say, WWU could possibly be staffed by professors who would be laughed out of the room if they tried to defend a thesis today. It isn't that they weren't worthy when they were hired; it is just that standards have gone way up. I personally have a better publication record now than Randy Pausch (famous for "The Last Lecture") had when he was made a full prof; I don't even rate an interview at top schools today. WWU may simply be looking at what they have, and then looking at what the supply of desperate fresh grads are, and deciding that the logical thing to do is to wipe the slate clean, keep maybe one or two of the old faculty, but to otherwise start fresh with, talented, sharp, bright-eyed, and coincidentally desperately eager, newly minted faculty. I've seen it happen at much more prestigious institutions.