That's just... wow. The Studio was the whole selling point of the Kin. I don't see how Microsoft can do this to their customers, with not a hint of remorse. Well... really... I'm not surprised... at all. Good on Verizon for going the extra mile for the consumer, creating the walkthroughs for people to retain their media/data and offering a free trade up sans contract renewal. (Obviously it's not all good-will and charity by Verizon, as they stand to profit from pricier smartphone plans, but still good to see something offered to the MS jilted customers)
The KINs were made with fairly powerful hardware, so if you can hack the software/firmware, they could make decent phones yet, just not as KINs.
Best idea I can come up with is closing the studio the way they plan and pushing an OTA upgrade to kill the whole KIN interface and replace it with WP7 or Android (or if you're REALLY crafty, iOS) designed to work with the KINs' hardware. Make it a bit more useful, rebrand the phones that were already made, and turn lemons into lemonade!
Also thinking about cloud computers, they had the Sidekick phone that was cloud base and they also pull the plug on that one if I remember correctly. They will do the same to the rest of their futur products they will pull the plug sooner or later(probably sooner).
Micro$oft ...Kin whatev... never bought into their crap. I bet some exec's got bonus money and boosts because it was a grand idea that took off at the table. And wrote off any losses but the higher ups got their Christmas presents untouched.... they suk.