So if you have a PRE FLIGHT requirement for a alternate that you no longer have IN FLIGHT then you continue to destination?
Yes, but the requirements become more onerous. Unless the destination is isolated (no alternate within 1:45 flight time; called Island Reserve with its own fuel and weather requirements), we always dispatch with a suitable alternate. When we discard the alternate in-flight due to higher than planned fuel usage, we have to protect against a loss of one runway, loss of precision approaches and poor weather, and probable ATC delays.
I'm not saying that the policy we operate under is perfect, but it attempts to protect against singular failures outside of our control, like grossly incorrect weather forecasts, or runway blockages.
FWIW, our airborne fuel policy in a nutshell:
In flight, we can continue towards the destination provided we can meet the following requirements:
1. Normal fuel required (includes fuel for a diversion to an alternate); or
2. Suitable ERA available (divert prior to passing overhead/abeam the last suitable ERA); or
3. In flight reduction of normal fuel required.
In flight reduction of Normal Fuel Required
If a flight will arrive at destination with less than minimum diversion fuel, you can continue to destination provided:
Enroute and prior to descent to the destination
a. the airport has two independent suitable runways (not crossing or reciprocal); and
b. the actual and forecast weather for the ETA has conditions better that the Non-Precision Minima for Filing as an Alternate, and crosswind within aircraft limits; and
c. there are no known ATC delays; and
d. fuel remaining is sufficient to continue to destination, +5% contingency from overhead/abeam the last ERA, +30 minutes holding at 1500' AAL, and complete an approach and landing. A further note says to use discretion and gives guidance to not use less a fixed reserve of less than 45 minutes.
After Commencing Descent
If a delay or unforeseen situation occurs that would result in the aircraft landing with less than minimum diversion fuel, the flight may continue to destination provided the landing fuel will at least be equal to fixed reserve. The commander must consider all relevant factors (Wx, delays, runway closure etc) before continuing to destination rather than diverting to an alternate.