I have VERY mixed views on this, which probably isn't helpful.
Ethically, I would feel if I had been out with someone and had a nice time, but didn't want to see them again, the polite thing to do would be to TELL them that, nicely and with lots of respect.
However, I have been on the receiving end, and in fact getting an explanation in black and white (or the text message equivalent!) hurt more. We'd met in a bar, met up once after that, had fun, I texted to say hi a few days later, and got a long text back about how he didn't want to hurt me but this wasn't going anywhere. I effectively felt like I had been dumped by someone I didn't even know I was going out with. He over-explained relative to our relationship I guess; in that case not hearing from him might have been easier in a way than being outright rejected.
And then the next extreme...I've been seeing someone I like on and off for AGES...but they won't give me any idea what's going on. This is totally on me. I've reverted to teenagehood...I cannot ask. At this point, even though we are not going out, however it ends it will probably hurt a lot just because we've been hanging out so long and I care about this person. I don't want to NOT see them any more, but if it isn't happening, a polite let down a long time ago would probably have been easier.
So, on balance, I think I am in favour of polite honesty - without making too big a deal of it.