Many a time in the not too distant past, I joined the mad dash from the metro at Heworth up the stairs and onto the last 194 (which was timed to leave seconds after the metro departed).
Even though it didnt go any further South than Newbottle, it was always busy on a weekend (along the entire route), not so much during the week - mainly as you say, because it saved people money.
It was the same with the X1, but GNE have stopped the late bus from Newcastle too - which I firmly believe had more to do with staffing levels (possibly driving hours) and the urge to reduce costs seen in the minimal staffing levels on a night from Washington depot.
Without looking at the bigger picture and like the 194, passenger numbers on the late X1 (particularly on a weekend) were high enough to justify the service.
However high passenger numbers were and ticket prices are, if you look at revenue breakdown, this will be low - the amount of passengers using some sort of day ticket was high and if that day ticket has been used a number of times over the day, then the revenue value of each passenger is diminished, particularly over longer journeys. Add that to an empty bus coming from Easington Lane towards Newcastle and it is possible to see why it was axed.
RE: Go North East