A stakeholder analysis may conclude that your project has no support – now or ever. In terms of costs and benefits it should be obvious to end it. But it’s hardly ever clear cut, especially if someone’s job depends on the project.
I’ve seen other reasons to keep projects going, even though they were certain to fail. One time, an analysis for a lobby organization reached the conclusion that parliament would not give them what they wanted. Not only did the project manager’s job depend on the project, but the organization was being pressured by their members to convince the elected members. So, they continued the project, simply because it was easier to explain to their members that parliament wouldn’t budge than to explain that they stopped their efforts.
When a project is doomed to fail it stops being a project management problem and becomes a communications problem. And lying to your members doesn’t seem like the way to go. After all, trust is very easy to lose and very hard to regain.