Long Essay mode: ON
First reaction: "What the hell?!?!?"
Then I calmed down and thought about it logically and from a business standpoint and realized, that yes, it does make sense.
I can't imagine everyone's contracts just up and dissolving on the same day for everyone. I know we all say UFA is dumb and idiotic, but I don't think they'd be insane enough to kick everyone out completely. Therefore, I must conclude that the main purpose of this isn't to disband the groups and let everyone disappear from the public eye.
So what is this about?
1. Consolidating the H!P brand as U-20 idols and idol groups.
Instead of having to explain H!P as idols, idol groups and a bunch of soloists-who-used-to-be-idols-but-kinda-aren't-anymore-but-still-are-under-the-same-umbrella, you shorten that to the first two.
2. Freeing a bunch of girls from the label and stigma of being an "Hello! Project idol".
We know what a burden the label "idol" can be on these girls. Not only does it restrict them from pursuing personal relationships, but it can also limit their credibility in other pursuits. This way, they are free to do things like Hangry & Angry. So, if they aren't idols anymore, what does that make H!P if they keep them in the same category?
3. Removing the need to have a big annual Elder Club concert that doesn't tour around for many performances, keeps them from doing soloist-type stuff, and could potentially be considered a drain on resources.
This one is a bit of a stretch, but it's altogether possible that the Elder Club concerts just weren't considered as profitable. Instead of occupying 3 to 5 acts in one concert, they occupy over a dozen. This way, they all will be free to do individual activities and events during that period. Besides, the summer H!P concerts haven't included the Elder Club as a whole for a couple years now.
In my mind, this is kind of like re-organizing your media library and putting a chunks of it on separate HD partitions. It's all still there, ready to be accessed, but it's in a different place under a different name. I can see why they'd do all this reorganizing from a marketing and logistics standpoint, and it does make a good deal of sense. (Another analogy would be the US Air Force being split off from the US Army.)
This is kind of like rewriting a dictionary definition to be more precise. We all knew that at least some members no longer (or never did) quite fits the general "Hello! Project" idea. In particular, it would be a little of a stretch to continue calling Inaba, Maeda, Matsuura, MKB, Tsuji, Iida, Nakazawa, and Yasuda "idols".
Instead of flipping out and having scandals if/when more risqué things happen to these members, UFA can just say "oh, they're not really idols anymore, so they're free to do stuff like get married". Even if it does become a scandal, whatever happens is insulated from everyone else. (Going back to the separate HD analogy, if one fucks up, you don't lose all your data. See: Abe Natsumi in 2004, group apology for)
With all that settled, the only questionable thing in my mind is the fate of Gatas Brilhantes H.P.
I guess they'll have to be renamed Gatas Brilhantes U.F. now?
...Is any of this analysis helpful to anyone else, or am I wasting my time on a tl;dr post?