Things sounded a lot less idyllic yesterday, with Arrington saying, "the entire project self destructed over nothing more than greed, jealousy and miscommunication." I'm willing to believe that characterization, but only if Arrington accepts his share of all three contributing factors.
Arrington mentions that neither party owns the intellectual property, and I'm not qualified to say who owns what. But the project started with the idea that they would "open source the design and software," so couldn't anyone build a replica anyway? Reading the obituary for the CrunchPad, it didn't sound anything like the egalitarian creative commons that it was sold to be when the project was created. If it still is really that open, Arrington can simply take the current unfinished design to someone else who is willing to work with his vision.
While the CrunchPad went through its stunted circle of life, plenty of netbooks, smartphones, and e-book readers have arrived on the market. Those devices have features the CrunchPad lacks, while the CrunchPad's singular claim to fame is that (if successful) it will have a large display but cost only $200. That one-trick pony doesn't look as attractive as it did sixteen months ago.