vasquo:
Their pension costs are out of control. That's what's killing them.
The USPS pays into the FERS (Federal Employee Retirement System) like all federal agencies and USPS employees will receive retirement benefits identical to all other federal employees (*some exceptions, of course). Unlike other federal agencies, however, they're being forced to pay in at a higher rate, or more generally they're being required to generate a surplus in their retirement fund because the OPM (Office of Personnel Management, which manages FERS) has determined that the USPS is at risk of collapsing.
I also agree with cr0sh; if you dismantle the USPS it will just be replaced by other services (FedEx, UPS, etc.) at a higher cost.