I think it was just the bad luck of the draw. I don't know how Idol could benefit from Lilly or even Katelyn going home.
As much as I love you and this thread...I sincerely believe this is the LAST season of AI.
This show is heavily marketed towards younger people so it stands to reason that more mature sounding people might not make it. Lilly looked like she got punched in the gut when the announcement was made. Poor woman.