Power BI Service discontinued

If you mean "Power BI Report Server" (on-prem solution,  similar to cloud "Power BI Service") no one knows the long-term plans, but I don't think that's true. Here's more reason why not.
-Microsoft is now on "cloud first" strategy, but not on "cloud only" strategy.

-Currently, cloud based Power BI Service, is not suitable for large enterprises (for scalability and licensing reasons). In large enterprises is not possible (now) move company wide on-premise BI solution (any) to Power BI Service cloud.

-When for cloud based BI solution is Microsoft with Power BI Service clear leader, for competitive price (in cloud solution). In compare with another on-premise solutions is not competitive. Microsoft need this on-prem solution to cover this segment, to keep leading position (e.g. Gartner MQ position Microsoft to Leader, but thanks both, cloud Power BI Service and on-prem BI solution (based on SQL Server, and including Power BI Report Server).

-Microsoft now selling Power BI Report server within two product, as feature of SQL Server Enterprise edition with SA, and as option in Power BI Service Premuim capacity, in both it is not cheap, and companies invest to this solution, and it can not be removed in short time.

No I do not believe this is true. Can you post a link to the source of these rumours? 

I have not seen any announcements of either the service or Report Server being discontinued. The only thing that was discontinued recently was support for Internet Explorer with Report Server, but that browser is out of support itself.