just became aware of that footage and we had a discussion in my guild's forums. We basically have concluded Lucs Arts killed the game to keep it from becoming a competitor with their impending KOTOR MMO , I mean after all it wouldn't do to have a free to play XBOX 360 console title with superior graphics and no pay for play monthly subscriptions outselling the new cash cow. It is possible that Lucas Arts will salvage tech from the FR team to use in KOTOR ,as im sure LUCAS ARTS made certain to own all aspects of the canceled game.
Lucas Arts keeps investing in new games , then cancels them before market. FUll Throttle had 2 canceled sequels . I'll bet if someone interviewed the PR department they'd use a excuse about commitment to quality being the reasons.