For a company that succeeded partly by leveraging the economic value of hackers in a way that hadn't been been done before, this decision is disturbingly out of character. It feels like something that must have happened for inward-facing political reasons - in other words, a sign of rot.
I get that Steve told Larry to focus, but "code" and "search" almost define focus in their case.
Edit: It seems the service is still available under a different URL. Weird, but I'll happily take it! http://news.ycombinator.com/item?id=3487950