If TLG is a half-assed mediocrity, Ueda is finished, with Sony, without Sony or on his own. He owes it to all the people who have been advertising his team's work, for free, for all these years, even though his games sold very badly. He owes it to his niche audience who have kept him employed and taking his sweet time with Blizzard-like development cycles and to all the game journalists who never stopped praising his games to deliver the game that he promised, and he has to make it GOOD. Behaving like a 3dRealms employee is fucking unacceptable, unless Sony somehow fucked up his game, in which case he needs to be honest with his fanbase, come out and say it out loud. They are all he's got. Dev studios are closing left and right with 3 times as many sales, what has kept him alive is overwhelming critical acclaim and fan devotion, he must not fuck this up by being a douchebag at the last second if he knows what's good for him.
From what I've seen, I think I'll enjoy this game. That being said, I'm not really attached to Ico so whatever happens won't really affect me too negatively if it does get cancelled. However, I'd prefer it keep on truckin' of course.
My friend was the one who mentioned that the game might be cancelled and he was really unimpressed with the mere possibility.