In the end, the only responsible decision, the only decision that respects the community and the core values of the project was to retire v5.
Firstly, our apologies for not being better prepared with a public announcement for those of you not at Codegarden regarding v5.  It is not a decision that has been brewing for months, but a discussion that was started and researched a few weeks back, culminating in an honest and open conclusion made by the community group who attended the weekend's pre-codegarden retreat.  These were not all HQ and core members but an impartial and honest group of both core and community members, new and old.  
That being said it is a decision that has not been made lightly and on the spur of the moment however happened quickly as it was in the end the most obvious and logical decision to make.  v5 has become an overly complex system that has turned into the very monster Umbraco was originally created as a reaction against.  The community was not involved in its development, with one of the results being a highly complex set of code which also means the community will never HAVE the option of being involved with its development.  This goes against everything Umbraco stands for.  Within the community there was a great deal of frustration with v5.  It was difficult to use, had performance issues, and was generally not an improvement over v4.  The vast majority of Umbraco community members were continuing to develop and release using v4.
A simple look at the solution is to take all that is awesome about v5 and add it into v4.  We will still support Umbraco 5.2 to solve the worst issues with those still running a v5 site, but at this point we cannot recommend beginning any new projects with v5.  The focus needs to return to simplicity, community involvement and transparency, and more will be posted in the coming days/weeks with regards to these things.
Update:
Watch the CG12 keynote where Niels explains the reasons why development on v5 could not continue. CG12 Keynote Video