Yep, I think they realized they couldn't sell it as-is. They also were probably in trouble with the new platform development. Put those things together, and they were willing to admit failure now rather than face failure and financial loss over time and delay the new platform. Trouble is that people already have lost faith in Palm's ability to produce products. Now that reputation is solidified, and not for the good.
Ironically, I do believe in the Foleo concept, as long as it includes an easy terminal mode for it to be used with the smart phone. Maybe that's part of why they delayed... Foleo might only really make sense once they can provide the value-added pieces together with their new OS smartphone platform and the integration features. Especially in the face of cheap UMPC competition.
Palm still, even after all this, is still in a position to succeed wildly. But the window of opportunity is closing, and they have to actually be able to produce the goods. We're all starting to doubt that they can.
Palm, I'm still hoping you pull all this off and succeed. But I'm not holding my breath.
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