I'm not too sure because to be honest, I was against this show, being a Justin Hartley GA fan at the time, that I didn't start following the show until season 2. But I do remember her being cast and the general belief was Laurel is going to be the Dinah Lance we know from the comics.
When season 2 started, and they bought in a Canary, and it was Sara, it looked like they were doing another one of their twists, like they had done with various other characters in season 1, such as Malcolm being the Dark Archer, and not Tommy, as you'd suspect. But then the rumors starting coming out that there was tension behind the scenes with Katie and Guggenheim, which was further fueled by Katie talking about how bummed she was to see that Caity Lotz was bought in to play the character she felt she was supposed to be.
So things looked fishy that early. But then the plan is set for her to finally be Black Canary, only for Felicity to be put in that female lead role in season 3. Most core fans hated that the romance was the focus, and this season, after promising to do better, they went back on their word and made it the center again for the second half.
All of this is why I strongly believe Guggenheim essentially forced her out. After all, if DC has plans for the character, why did they introduce a successor in the next episode? I strongly feel that Katie spoke up and asked for more screentime, and Guggenheim said no because Olicity, his pride and joy, needs the focus, and gave her the choice. Plus, keep in mind, every romantic interest Oliver has had has died, with the exception of the cop chick and Huntress, who both are on different series now. Even Laurel, before her death, their relationship was essentially being retconned to the point where it was only significant because Sara died and Lance hated Oliver. It seems so clear that they are trying to make Felicity be the only woman in his life that he can have any kind of romantic tie to. If Laurel is written off, people will still think there's a chance, and he needed to kill that so people could fully support Felicity, with the hopes of having this Lauriver/Olicity war end with a definite winner.
And to that last part, no. In Hollywood, you can't throw people under the bus, at least not right away. You lose a lot of trust and credibility that way, so it works in the favor of both parties to keep that a secret until years from now.