It seems to me that there were at-least three better ways ATC could have handled this...
(1) A handover (possibly to xxxxx, since I was not yet very close to my destination, which also was non-radar.)
(2) A warning before that point that they needed to cancel the service, and asked my intentions.
(3) A request whether I was VMC and/or able to accept a service cancellation before then making the next decision.
It seems to me you got a good service. However, let's look at your three points..........
1) That's not always possible for a number of reasons eg where I work, at weekends, we are one of the few LARS units operating, in fact we cover from the south coast (Lyme Bay direction) all the way up to Herefordshire, and if you track from Seaton (pvt strip) to Barton say, there are no units to handover to who will provide a LARS. We can only provide radar services to a prescribed limit, ours is to 42.5nm. Outside that radar services must terminate.
2) We're not required to do this, so we don't (well, some may, but not all). I see nothing wrong in what the ATCO did.
3) Ditto.
Begs the question, how was the ATCO to know you were still in IMC? And what exactly do you propose he or she does about it? There is a reason why we can only work to a set limit, who's fault would it have been if you had been receiving a radar service ie TS outside this limit, in IMC and had bumped into something? The authorities would have been going after the ATCO for doing so, and why, just because you think they should have still been providing a Traffic Service?
I know this isn't a fashionable view among all, but here goes, GA traffic gets a fairly good deal in the UK as far as I can see, but still the Air Traffic community gets complaints because the system isn't perfect. Perhaps you could, through some GA body, lobby the CAA to pay units more money to make it feasible so that every radar equipped unit can afford to offer a LARS function while they are open, then you would have better coverage. Oh, and look at my answer to a pilot a few days ago re co-ordinating onwards with other units, not always feasible.