Is it really the worst thing in the world if Red Hat doesn't want to make a consumer-grade desktop Linux distribution?  I don't think so.  With all the things Red Hat already does so well, it's not as if it's missing out -- and if other people already are hard at work on that project, Red Hat still won't be missing out.  This is open source, remember?

The insinuation many people have read into its recent statements about making a desktop distribution was that it would have a hard time competing against Microsoft's entrenched desktop presence, which is always an easy target.  There's a kernel of truth to that, though: building a consumer-friendly distribution of Linux is just the beginning.  You have to get it in front of people and make it a viable alternative -- something that's happening a bit more with Linux on the low end, and in fact Red Hat has been working on just such a project -- the Red Hat Global Desktop Program.

Still, with all the existing desktop distributions out there that work remarkably well, Red Hat would probably just be duplicating work already done elsewhere if it tried to create something intended for mainstream users.  Its talents are best served where it has honed them -- in the enterprise, both in the server space and on managed desktops.  Finally, since just about all the work being done for user-grade Linux is open source anyway, it'll all benefit Red Hat in the long run as well.

Red Hat isn't admitting defeat by doing this -- no more so than General Motors would admit defeat by not making skateboards.  It's smart to stick with what it knows, and not try to become all things to all people.