As with most incidents like this, there are conflicting narratives. About the only thing everybody seems to agree on is that the decision was motivated, at least partially, by the networks; they principally disagree about the specifics.
In a 2009 interview, Damien Kindler (the show's creator) claims it was a creative decision:
To be very honest about it, it was a decision we arrived at with our two major networks in the U.S. and Canada creatively, and we really felt it would have the deepest, most dramatic impact on the series and the characters
However Emilie Ullerup, who played Ashley, speculated in a 2009/2010 interview that it may have been because her character was not well-liked (though she confirms that the networks were involved):
When I ask Emilie what was behind the decision to kill off her character, she says she's still not sure. "It was a network decision. And, to be honest with you, I don't quite know why. I get a sense that the network felt that Ashley was not very liked and not one of the favorite characters." The network had determined from audience research that Emilie's character was not popular — but we may never know if this was at the heart of the decision to kill Ashley Magnus just two episodes into the show' sophomore season.