Already, the comment thread on Engadget is rife with comments that "The Google Phone is Dead!" without reading the entire article. All Google is doing is reverting to the same selling model that is already familiar to US public. The reason for this move? People want to see what they're buying.
As an N1 owner, I admit that there was considerable apprehension when I handed my credit card information over to Big G. If I had the experience of handling the device prior to purchase, I would have been far less nervous and much more enthusiastic (although, I'm sure I was sickeningly enthusiastic anyways).
Google will continue to sell the N1 on their web store until the headset attains general availability in retail stores.