Think about it this way, right now, MS biggest enemy is the forum people. It's understandable because everything blew up because of e3 and the pre-reveal. If your message isn't strong enough, it'll get taken apart and questioned bit by bit. Then they'll take your words and say "but you said this just a minute ago".
The idea of just having a showcase means that instead of announcing directly, they leave it up to the press and attendees.
This way, they hold no liability over promises made, and instead of just seeing the console, you'll instead get first hand accounts of the users.
This transforms a tenuous situation into a safer one. All you will be hearing is, "I played this and it was great", "this worked really well", "I was surprised", and the media will be saying "so, it looks like this is fixed, so that's good".
Press isn't very skilled at analyzing what's going on, and since you can't really record it, they can't go back and factcheck.
In itself, the only thing we can ascertain from the cancellation is that MS chose to go a safer route, meaning they are confident in their platform, but not of their management.
It would be like having a new law simply be introduced via the written word, rather than let joe biden talk about it.
TLDR: This cancellation means MS clearly understands their strengths and weaknesses. Likely, strength is in the system itself. The games are good, the controller is awesome, and it has some cool features. The weaknesses are in the management, the representation, the image, and the forums.
