I am Turkish, so I might be able to offer some commentary. What is said is essentially correct, but I'm more reluctant to assume this is the reason why. Turkey has a long way to go and many other problems to solve before it can become an EU member, and Europe has its own problems too. Cyprus is too unimportant for both sides to care about right now. When Turkey's time comes for the full membership and agreed by both parties and if the Cyprus remains the only roadblock, the heat from Turkey and EU can sink the entire island in one day so it is likely that they will cede. In the meanwhile, it's a convenient excuse. However the other issues facing EU membership of Turkey are pretty serious, so they'll be able to play this game for a while. The problem facing Turkey is, essentially, when or if the country joins the European Union, it's going to take around 1/4 of the chairs in the European Parliament (it's based on population, Turkey is about the same size as Germany population-wise), effectively becoming an instant major player in EU decisions alongside UK, France and Germany. This upends the power balance in Brussels. While on paper Turkey looks like an another regular Eastern European acquisition for EU, it is in effect a larger process than the entire history of acquisitions combined because of political, cultural and populace implications.
Even then, Turkish population has largely soured by the 30-year-long waiting at the gates game, and they are not as likely to accept then shown the financial implications of an EU membership. Considering Turkey has largely been impervious to financial perils of the EU (chugging along with a fine 5% growth rate through it all) and also considering GDP wise it is now one of the Top 20 economies in the world, with the second largest army of NATO after the United States, an EU membership, once a dream, is starting to look like not that good of a deal.
Turkey is essentially the thing that stands between perpetual war and dictatorships of Middle East and "civilised" Europe.
I am not Turkish, by birth, but I am Turkish by choice (I currently live there)...
This is a really good summary, but I think you're downplaying the importance of Cyprus a bit. Yes, Cyprus is a bit of a pawn, but it's an increasingly dangerous pawn. The other angle to the Cyprus question is the discovery of gas reserves off the coast, the debate over who has rights to exploit those gas reserves (since the Turkish Republic of Northern Cyprus controls the north, but is only formally recognized by Turkey), the deals that the Greeks and Greek Cypriots have struck with Israeli firms for the exploitation of said gas, the recently soured relationship between Turkey and Israel (who have been traditional allies), and the desire of the current Turkish government to become a champion for the middle east and/or (depending on how you spin it) the Muslim world.
Cyprus may just be a tiny island, but it increasingly seems to become the focus of so much of what is going on in the region. That said, I agree that the whole relationship between Turkey and the EU has become...complicated. It is interesting the reversal of fortunes that has led to the situation going from one where the EU was reluctantly working with Turkey on accession in 2005 to one where Turkey is the reluctant partner today. As distasteful as it might be to some in the EU, I think it's become clear that Turkish accession to the EU would be the best outcome for the EU.
I never met a foreigner deciding to live in Turkey before, it's interesting! I'm currently living in the States, so I am also an expat. The question of gas reserves is a serious one, but as the saying by Mao Tsetung goes, "You can get much farther with a kind word and a gun than you can with a kind word alone", and Turkey has many (way too many, in my opinion) guns.
Souring of relationships of Turkey and Israel was only a matter of time, I believe. The populace is overwhelmingly against Israel and the government played that hand for votes. It is also important in the area which Turkey wants to assume leadership, Middle East, in that any action, words or whatever against Israel gets many applauses. I personally believe future of the country lies in the West, not the East, but I am of a dying breed of Turks that identify with the West rather than Middle East.
My wife is Turkish, and over the years of visiting Turkey, I fell in love with the country. Also, given the state of affairs in the US (especially with respect to education), we figure we're no worse off raising our children in Turkey. Of course, we also have a number of contacts in Turkey which make it easier (we plan on sending our kids to private school)...but that's a whole different topic for another time!
I think it's definitely interesting times in Turkey. I know a lot of people are worried that a turn to the east is a foregone conclusion, but at the same time the growth in places like Istanbul and Izmir is hard to ignore. Just a few weeks ago there was a major meeting of tech startups and VCs in Antalya. There's no guarantees, of course, but I think it's not impossible that Turkey could become a major player in the world economy in the next 15-20 years...
One potential downside: I personally could find no satisfactory career paths in Turkey—that's why I decided to come here to the States to study. Any place that would accept me as a designer were paying below $1500 start-up salary per month, which is ridiculous in a city like Istanbul, which has traditionally been one of the more expensive european cities. The living cost in Istanbul and New York is pretty much the same for me, at least, while in New York, as what I strive to be, I am far more confident in that I can make a living out of it.
Turkish public high school education is far better than the U.S. public education, and the private schools, provided you pick carefully, should be up to par with their european counterparts (which is pretty good). But for the universities, definitely send them abroad.
I didn't even know Turkey had VC's! Interesting. If you do such things, we can meet up for a coffee somewhere in Istanbul this summer, I'll be back for a short break. Meanwhile, enjoy the country!
Even then, Turkish population has largely soured by the 30-year-long waiting at the gates game, and they are not as likely to accept then shown the financial implications of an EU membership. Considering Turkey has largely been impervious to financial perils of the EU (chugging along with a fine 5% growth rate through it all) and also considering GDP wise it is now one of the Top 20 economies in the world, with the second largest army of NATO after the United States, an EU membership, once a dream, is starting to look like not that good of a deal.
Turkey is essentially the thing that stands between perpetual war and dictatorships of Middle East and "civilised" Europe.