Nenjin, thanks for your response. I think you've hit the nail on the head with the decision to cancel the game ...
They also stopped and realized that, while they had all these amazing ideas for the game, they'd never actually thought about how it would all work AS a game. So they got cold feet.
They've said as much on the blog, but it does really make sense when you compare the different life situations of various indie game developers.
I've been following Subversion, the blogs, the website for a long period of time, and have never been truly convinced that Subversion was anything more than a few experimental steps.
Here is what I base my argument on. Thanks to the wonderful internet, there have been all kinds of people who have documented their development process of various things, in an effort to give something back to the world.
Here's a link to a procedural city generator somebody made in 50 hours of coding - that's approximately one fulltime workweek for a programmer ...
http://www.shamusyoung.com/twentysidedtale/?p=3220. If you scroll backwards and forwards in the article, you see how it is designed, and eventually you can download it (as a microsoft windows screensaver). In my opinion, it looks fantastic and "better" than Subversions, but obviously, it's not a game.
Now, if Introversion's city generator took 200-300hours, that's still an awfully little amount of work to be spaced out over the period of 5 years.
Maybe they weren't able to wrap their heads around Subversion technically - I know it was very lofty in ambition for a small team to work on - but my opinion is that they just weren't seriously working on it rather than hit a technical barrier.
As far as Prison Architect, I hope they do come up with the paid alpha this year. I realize they "might" have let someone preview the game and that implies that it isn't completely vaporware, but the fact is, the guy from wired that said he played "15 minutes" of it and couldn't even be bothered to take a screenshot of something that was not in the teaser video? It's easy to provide proof that the game exists. Introversion has always posted bits and pieces of their development process, but why the change now? Is it that revolutionary that nobody can see the magical interface? Or do they think that if they release too much insight, a faster studio will gobble up the idea and produce it and ship it long before the fifteenth teaser screenshot is released?
I think that Prison Architect has the capability of being a fantastic game. I think Introversion knows how to create good games, and the polaroid sequence has already depicted that they are going to have some sort of meaningful stories involved. But why are they so damn secretive about it when they've been open about everything else?