This is both incredibly disappointing and completely unsurprising.
Shadow of the Colossus came out near the end of the PS2's main lifecycle and nearly crushed the power of the system under the weight of what it was trying to achieve. I don't doubt that this is the same situation with The Last Guardian. The game was certainly one of the most ambitious of this generation, and I suspect that once again the team is trying to implement effects that have never before been seen on consoles, just as SotC did. Pair that then with the difficulty of developing sufficiently advanced programming for Trico to make it seem like a fully realized creature, rather than a simple tool for your own game advancement, and I can imagine the difficulties they are encountering.
And all of these technical difficulties must be addressed before the developers even design much of the game itselfthe puzzles, the traversals, the architecture of the in-game areas, etc. Making Trico comply to the game's designs may simply be proving too difficult when they've been attempting to always make the creature so much more than simply another of those designs.
The Last Guardian has been my most anticipated game since I played SotC in 2005, well before the game was ever announced or shown, but with so many difficulties encountered, so many new arrangements in the management, including the now freelance capacity of Ueda, and so many other teams getting involved to push this thing out the door, possibly diluting the original team's visions while perhaps also rushing the development, I don't know what to think of this game any more.
Team ICO as we knew it is in ruins. The Last Guardian seems to have now become Sony's own pet project to not only avert an enormous waste of money, time, talents, and assets, but also to prove that the gaming division as a whole is still capable of producing something like SotC. This could be either their most glorious success or their most ignominious failure.
I still have a glimmer of hope in my heart for The Last Guardian. I wish all those laboring over this beast the best of luck.