I don't think that the cancellation of this game is Phil's fault.
The cancellations were made after Kaz took his job. Phil were the one who agreed that this game should be made by that studio, in the first place. :-/
Many upcoming firstparty shooter-franchises on PS3; Resistance, Warhawk, Uncharted, Socom, Killzone, MAG, and so on.
With the exception of Uncharted all those games seems to be heavy with online-features, wich everyone says is a must-have in the future.
So it might be that Kaz chose the right games to cancel, if they couldn't sustain the budget, at that time (before MGS4 had become the game it is). :-/
Hopefully more fence-sitters will invest in a PS3 soon, and buy more 'hardcore' games, so Sony will not cut more games, they are missing out on alot of really good first-party stuff.. :-/
That said, the video in OP of the animation of the main-characther looked damn good.
It's very sad if that will never see the retail-shelves. EyePet look good aswell tough, hopefully it becomes sucessfull, so the developers dosn't get even work down the drain. :-/
I do not think that those studios will be stuck only doing 'life-style' games, from here on and in. The studios are too good for that. :-/
I take it for granted that the studios with less technical expertise, like Relentless, and similar, will handle that.
While the Cambridge-guys and others, wich are really good at bigger productions, gets to work on cutting-edge products.