The decision to drop WinFS is over a week old, now, and there has been plenty written about it. I offer this link to a short, definitive article on the subject.
I'm disappointed, very much so. For the last week I have been reading books and articles on file systems in an attempt to become fluent in them. In addition, I have studied relational databases. I think I finally understand just how ambitious WinFS was (is?) and how much it would do for those of us who work with large datasets, whether our own or those belonging to our employers. Without WinFS, Vista is just another Microsoft operating system.
Microsoft did a horrible job of pitching WinFS and without specialized knowledge the general public never could understand just how much it might have changed the way we do things. I believe I understand that now. That understanding fuels my disappointment.
I don't think MS pulled WinFS lightly. After all; they had touted it as a "pillar" of Vista and I have no doubt at all it would have been just that. Every time I look at my collection of "how-to" documents I think of how easy it would have been to find things I needed to know, had I been using WinFS. I really do hope they continue to develop it and offer it sometime in the future.