@JoshRoss: I'm with ArsTechnica on this one: I can't really see why anyone was surprised by this. I'm sure that Silverlight is very impressive tech, but this kind of proves what many folk have been saying for quite some time: Jobs dictates, MS follows. I didn't really pay any attention to Silverlight because Flash has a greater reach and, without Apple's blessing, I didn't see a long term future for it.
Muglia said in his blog that it would be impossible for something like Silverlight to target a range of platforms. Really? Adobe seems to have done it. And that leads to another problem: pulling back and circling the wagons around WP7 is okay as a short term solution, but surely it would be much wiser to protect your investment and focus on Flash which is too firmly entrenched for Apple to dislodge entirely (once the other smartphones have Flash support then Jobs will probably have no choice but to allow it onto his iStuff),
This is not really a criticism because I think Microsoft's reasoning is sound. It just sounds like a very much like chapter one of the usual MS tech abandonment story; you know the one: it usually ends with a lot of angry developers and a spokesbod saying, 'We learned a lot from our experience but…'