So, depending on who you ask, Willow Garage is shutting down, pursuing commercial interests, or changing direction. But things are not as dire as some may think: ROS is fine (the OSRF will support it) and there are many options for Willow Garage to explore. Personally I’m hoping it will be snatched up by Stanford or another academic institution and become a research institute. But given the number of robots they have out (and their price tags!), a commercial path into the future seems even more likely. In any case, I doubt that Willow Garage will disappear just like that.
What caused the changes is that Willow’s founder and funder, Scott Hassan, has decided that it’s time to wean Willow Garage from his private financial support.