Sorry folks but this is just HP's way of trying to make a dignified end to an embarrassing episode. The world is littered with operating systems. Without a committed hardware manufacturer there is no economic model that works for webOS developers.
I am pretty glad that the new CEO, along with all those involved, decided to do this. People love the platform, devs like, other companies couldn't wait to get their hands on it and a lot of users have said the platform has very nice UI.
So, I'm not ready to say it's just something to "save face". It's their chance to open source something, build a healthy ecosystem and provide a 100% open source alternative for Android.
The only hope is that if Nokia becomes successful (wildly) with the Win 7 platform and Motorola does the same with Android, then as a product differentiating factor, manufacturers like HTC may pick up WebOS. Now, that's a really long shot.