I still hold to the theory that Google didn't cancel the N1 because it wasn't selling well enough - rather they cancelled it because they worried it would sell too well. In other words, they only wanted to sell it as a flagship device and as insurance in case they couldn't get wide adoption of Android. It was a backup plan. Once they had a whole array of carriers on side they no longer saw it as in their interest to have a huge market of N1s out there (which they have to support). With so many carriers embracing Android, the danger for Google now is doing anything that interferes with that.
Indeed, how would low sales have been a reason to cancel the phone? How much overhead can there be selling one item through a website, with virtually no marketing or customer service?
And now they're going to keep selling them anyway, so they have to keep the whole pipeline running, but they still won't sell them to consumers.
Either they are not making a profit on the phone or there are hidden motives at work here.
