In that case it _could_ be reasonable to let the bank foreclose on it. I know people that have done this to their relief. Obviously a more serious decision than selling a house, but still less serious than selling children.
Foreclosing isn't as easy as it sounds. For one, the bank can sue you for the difference between the auction price and the loan. For two, the IRS will expect you to pay taxes on that "forgiven" difference. For three, your credit will be (temporarily) ruined and it will be difficult to get a new apartment/mortgage/loan. So, owning an underwater house can be a big problem. Though, sometimes it is worth it to sell for a loss in exchange for freedom; within reason.
Oh, I wasn't really suggesting it's simple. I don't envy anybody in that position, and hope anybody thinking of walking away from such a situation does so on good advice. I know two people who've done this; I don't know the low-level details, so perhaps it was necessary for some definition of "necessary", but the next few years will be interesting to hear of, regardless.