I personally don't have a problem with the Cobalt, especially in SS form. I'd still rather drive one any day vs a Corolla or Civic.
However, it isn't a class leader, and thats always been its problem since it was introduced. So GM has decided forgo redesigning the Cobalt and will instead replace it with the Chevrolet Cruze.
The Cruze is expected to be a contender for the top of its market segment, whereas the Cobalt was typically merely adequate and as a result towards the bottom of its market segment.
If the reviews of the Cruze's that are already on sale in other parts of the world are any sign, the Cruze is definitely going to hit its mark and will be giving Civic, Corolla, and Elantra a good run for their money. And the best part is that the Cruze model that is coming to the US is supposed to get an even more refined powertrain, and will naturally be more refined than models sold in other countries (I'm sure they will be learning from any mistakes made in the other launches and fixing them for the US launch this spring).