To be fair, the open source nv module wasn't used by anyone I know for anything else besides having something rendering the screen while they have downloaded and insalled the proprietary nvidia module. It did provide some basic 2D acceleration but it was largely inferior to the proprietary driver anyway. I think that open source purists never really favoured NVidia cards anyway due to this reason so it's not like they're going to lose an awful amount of customers because of that. I think it's likely that this was a purely economical (cost cutting) decision.

Unrelated but still related reading about the current problems of Linux graphics drivers is this post on Linux Hater (offensive language): http://linuxhaters.blogspot.com/2008/06/nitty-gritty-shit-on...