Long story short: Microsoft realized that Entity Framework was taking longer than expected. But they really wanted an ORM to ship with LINQ. So they took a smaller mini-ORM project that was really written for testing LINQ and was never intended for production, hastily dressed it up, and pushed it onto the market as a stopgap. Entity Framework was still happening, mind you - Microsoft never actually planned to support LINQ to SQL long-term.
But they never really mentioned that was their plan. So a great many developers had already written data access layers based on it by the time Microsoft announced they were going to stop supporting it approximately 11 months after it was initially released.
I actually can't think of a case as bad as Apple axing the Xserve line and telling people to use mac minis and mac pros in a rack.