Apparently, the Post Office action came because of securitiy issues. They're trying to save the tradition. See:

http://ap.juneauempire.com/pstories/state/ak/20091120/526939718.shtml

"Santa's "elves" at the North Pole have been given their walking papers — but they're not going quietly.

"The volunteer "elves" are trying to counter a decision by the U.S. Postal Service to discontinue a program begun in 1954 in the small Alaskan town of North Pole, where they open and respond to thousands of letters addressed to "Santa Claus, North Pole" each year.

"The city was founded on the Christmas theme," Gabby Gaborik, chief elf among several dozen volunteers, said Thursday. "This is our identity. This is North Pole, Alaska."

"Gaborik said he met with Postal Service officials this week to come up with an alternative. He's now working with local government officials to get "101 Santa Claus Lane" as an address for his group, Santa's Mailbag. That way children will have a specific destination for their letters, allowing volunteers to run their own program and bypass stringent new rules implemented by the Postal Service after security issues arose in a similar program in Maryland last year.

"Gaborik believes his town's name gives the local effort more cachet than other destinations.

"People in North Pole are incensed by the changes. The letter program is a revered holiday tradition in North Pole, where light posts are curved and striped like candy canes and streets have names like Kris Kringle Drive. Volunteers in the letter program even sign the response letters as Santa's elves and helpers."