The ratings sort of answer that question, I think.

You're probably right with that guess. It's exactly how producers reason anyway. In a Hollywood movie, a director can very often get away with eye-candy for eye-candy's sake, and it makes a lot of them lazy, wasting cash for no good reason. On TV, even high budget TV, the writers/directors constantly have to justify themselves. "Because it would be cool to see the direwolf again" just doesn't cut it with producers. "Because we really need the direwolf for the story and here's why" is more like it. It's doubtful they got rid of the dragons merely not to have scenes with them, they didn't do much of anything and it's easy not to show them and use SFX to suggests they're there off screen. The kidnapping rather had the extra advantage of creating tension/suspense for cheap, but you can be sure the extra advantage of three episodes without the creatures didn't escape anyone in production with eyes on the series's budget.

I know many directors who prefer such constraints. They find it stimulates their creativity and force them and the writers to question their work a lot more. A local movie director once told me the worst thing he shot in his entire career was an episode for a US TV show. There were budget constraints, but not by Canadian standards. He found it liberating... only to realize in postproduction he's gone all too often with the easy solutions while filming, fell for the temptation of using the sets too much only to realize this or that scenes would have had more impact if framed much tighther etc.

They pull off little wonders with the budget of GOT really. When observed with an eye on such details, it's fairly amazing how they manage to stretch the budget. There's no Hollywoodian lazyness in there. With judicious creative calls, they manage to give the impression the production value is much higher than it really is. It has a lot of postprod pros impressed, dissecting scenes on Monday mornings. You look at a scene and it gives the impression it's very expensive, then you realize it's really just an impression and in 30 shots in a scene they had only five expensive ones and by judicious framing/editing they avoided spending much on VFX for the 25 others. It's the same with extras. They give you the feeling the crowds are there with sound, and they only show a lot of people in a few shots in a sequence. Few notice, they showed it enough to convince you the crowd's there and more is just indulgence and wasting money. They also make very judicious use of real vistas, not hesitating to use them a lot for wide shots in those scenes, and switching to much tighter framing and only a few wide shots in other scenes that would necessitate CG set extensions. They also don't hesitate not to show Rickon when his presence adds nothing. We someone so young on set, they have many schedule restrictions and it's easy to end up with costly extra days of filming because they're missing a few shots for a scene but they can't continue as the young actor has reached the max # of hours they can make him work any day by law. They really use the whole bag of tricks to save, and it's impressive how little that impacts of the show (except for the obvious, like battle scenes and such).