I read a really great article 2007/2008? about Larrabee and the author speculated that Intel was planning to temporarily CAN Larrabee and rethink it in terms of functionality or something. Perhaps he meant something in terms of trying to make it do more than just what a regular GPU does today.
So IMO, Intel decided to post pone and rethink Larrabee as a whole. We are talking about architectural changes something in which NVIDIA should have done with Fermi. But that arrogant prick of a CEO decided to release it hence we see the well deserved criticism.
If I can only find that article
One thing is for sure, I can't wait for Larrabee to finally get released into the discrete graphics market.
Should make for some good competition.