The nexus one is far from dead, especially with froyo.
I've seen head to head reviews, and the 6 month old N1 holds its own against the brand new (supposed to be superior) iphone 4.
Apart from 720p video, there's nothing the iphone could do that the N1 couldn't in pretty much everything I read. (and N1 can do flash, i4 can't)
Also, apparently 720p video is possible, it just needs to be enabled via firmware update/hack.
As said, google's just stopping the sale through the website. It will still be sold in-stores and through carriers (?). There've just been no agreements with Canadian or US stores announced yet.