To give my unsolicited two cents:
1) I certainly do not rejoice in this news, primarily because I feel really bad for the developers who poured their work into it for years. I sincerely hope that they are quickly snapped up by employers who will appreciate them more.
2) I do see a potential silver lining, that people don't really seem to be mentioning: could the end of FSW cause more people to switch to P3Dv4? I understand that they're in somewhat different price ranges (although FSW has been deeply discounted at least a couple times), but a quality sim takes capital. Lockheed has capital, and I hope they continue to be willing to use it.
Basically, as I see it there are two ways to develop a new sim - you can get the rights to FSX and build incrementally, or start something from the ground up. Way 1 has the disadvantage of beginning life married to the same crappy old 90's era engine, but the massive advantage of compatibility with existing FSX addons, and the ability for addon developers to very quickly support the new sim. Then you gradually fix bugs, add features, and replace the problematic FSX bits. Compatibility between the new sim and FSX and winnows gradually, but by this time the quality gradient and addon stable are both so large that no one minds. To my eyes, LM is executing this approach masterfully. By this point P3Dv4.2 is sooo far ahead of FSX - the graphics are far better (and far better than FSW on my machine, it must be said), the environment is much better, most of the annoying bugs are fixed, and the SDK interface is so much better (almost every tool/API I wish I have in FSX is now there). So as a developer, I'm really hopeful that the switch of the large majority of the community to P3D will come soon, so that I can stop trying to keep things compatible with FSX, and can instead spend a larger proportion of my time making use of P3D's new features to make much cooler addons.
Way 2 would seem to be to start from the ground up - completely new engine etc. This would have the advantage of being an entirely 21st century product, potentially with much better graphics, performance, environment, physics, development tooling, etc. It would also have the disadvantage of not being compatible with existing addons. This requires (in my totally-not-at-all-biased opinion) that a considerable further amount of capital be spent both on developing an excellent SDK and also fronting a lot of money to developers to give them incentive to learn a new SDK and get a critical mass of diverse and high-quality addons in there ASAP.
Way 3 is of course the DTG way, which is basically to take the worst aspects of both of those approaches. That is, update the same crappy engine, but also immediately break compatibility with existing addons and addon development. Even if we ignore the massively superior P3D because it's more expensive, you're still competing with FSX steam, which has the huge dual advantages of a) already being there, and b) having a limitless supply of addons for whatever you could want. If all you are offering in competition is marginally better graphics, performance, and A2A accufeel as standard, then I just don't see that as a winning concept any day of the year.
So to sum up, disappointed as I am with the death of a new sim, there is a potential silver lining if it causes more people switch to P3D, which I really think is the future. I really do hate to be a cheerleader for the military-industrial complex, but currently Lockheed Martin are the ones doing it right. Hopefully they are making enough money selling it for training that they continue to spend on it at the current rate for some time to come.
