Actually, I DO find it may be their mindset. I mean, thinking about how they were set out to kill KARR BOTH times instead of just capturing him and rebuilding him, even though KARR was KITT's brother, and pitting KITT against him, etc. It's as if sure they take care of the car but when push came to shove they'd also just give it up too. I mean, wasn't there also an episode where the foundation was thinking of stopping the whole FLAG project and getting rid of KITT? Something with Jennifer Knight in it? Or something? Or was that a fanfic somewhere, I forgot? (If it was a fanfic, disregard that last question

)
But yeah, I agree one should never get rid of their best friend if they can help it. I mean, even with my car I do all I can for him and believe me, he was nearly Junkyard material last year with all the rust holes and major mechanical problems. Now, he's looking great and so far I'm kinda able to keep up with the fixups, even doing some of them myself to save money. When you spend a lot of time, money and hard work on something, you can get attached and not want to let it go so easily. Not as easily as Michael was about to get rid of KITT in Killer KITT, that's for sure!
I'm glad it had a happy ending though.

Maybe they just threw that in as drama to try and portray how seriously and possibly "too far gone" KITT was, as in Michael in an impossible situation, faced with having to kill his best friend to save other lives, but in the end they do save KITT too.