To be quite frank, this decision of Yahoo isnt surprising since they had revealed a need to cut down on employees. However that having an effect on its services, especially popular ones like Delicious is quite unexpected. There are only a handful of services from Yahoo which I find useful. Among them would be Flickr (the image sharing site cum community, which happens to have an incredible numer of professional photographers), Yahoo mail (yeah some of us still ue it) and Delicious. Yahoo search engine is nothing even remotely close to relevant, even the new Bing seems to have become more popular than Yahoo search (although Yahoo does contribute to Bing in a very complicated and weird way). So frankly Yahoo would be closing down one of its three most relevant services. Now thats really shocking.
Anyway the only thing one can hope is that Yahoo does get its act together and maybe integrates Delicious into one of its other social portals.