I think Palm just can't keep up with the competition.
Look at the Foleo. Palm announced a rather nice device that was supposed to integrate with your smart phone. I'm sure there was a market for it. But then Asus announced the eee, which does more and cost less. The potential market for the Foleo evaporated. Palm's newest product was a generation behind not just the bleeding edge, but the mainstream!
Now we find out that Palm's next OS will not be released until the end of next year. I think this is the beginning of the death of Palm. Why?
By next fall, the hardware will have advanced enough that there will be multiple handheld devices running XP and or slightly modified common Linux distro. If you can buy a device that can run lots of Linux software, or lots of Windows software, why would you get a Palm device?
The opinions are my own, but I got the information here: