Project Darkstar was doomed as soon as its main developer (Jeff) left and that was a while back. Better to let the project officially be killed then to let it be with no updates, it just ends up frustrating developers and noobs.
IMO this is just some house cleaning by Oracle rather then killing a thriving project.
I know I'm resurrecting an old thread but I just got around to catching up on these forums.
PDS was not dead at all at Sun. They had 6 people working full time on it, were releasing regular new versions, and were extremely close to getting multi node working. I'm sure Oracle have their own reasons to cancel it but the most likely is simply the combination that it's open source & research, which always makes bean-counters nervous.
We've created a community fork of the project called RedDwarf Server at http://www.RedDwarfServer.org
and have several of the Sun team members, Jeff, and a number of community people on board. The first release of RedDwarf contains nothing new from PDS but we are working on the next release now which will have some new functionality and a number of bugfixes.