So we have, I think, established that people didn’t think the HP TouchPad sucked… It was just priced a bit high. Now that the TouchPad fire sale is in full effect all of the main websites you could buy it through at the discounted price are either broken or out of stock.
If they had had a big time sale up front, perhaps they would have built up some decent market share and developer base and groundswell, and also perhaps the decision tree that led to the cancelling of the product would have been different. It was a bit arrogant to try and put out an unknown quantity pad into the market at the same price levels as the current market leader and expect to take market share. Especially in this economy[1].
joe
[1] This tagline “…in this economy” is starting to sound to me like “…in the Longhorn timeframe” that we used to hear all of the time out of Microsoft. 
Joe — perhaps our views are colored by our respective employers.
There are analogies between Apple’s iPhone/iPad, and HP’s consumer inkjets. The initial product (iPad/InkJet) doesn’t earn much profit. It’s the after sales (Ink/Apps) that do.
My own speculation is that HP must not have had a strategy to profit from WebOS App sales, and they quickly realized they would go broke selling tablets at both a profit, and a price consumers would pay.
Regardless, at this point there is no denying that every penny spent for Palm is now wasted. I’m not sure whether the mistake was spending the 1.2B to start with, or now throwing the remnants in the trash last week. Either way, its a bad deal for HP and their stockholders.