The question we have to ask here is; "Does this really come as such a surprise?". The Nintendo DS has been going from strength to strength and it has been proven in this years E3 with what is a stunning array of games lined up for the rest of the year.
To cite the Reuters article:
"I would have a second thought about using our resources on what would be the next generation of Game Boy Advance, considering the strong support DS is now enjoying," President Satoru Iwata told Reuters on the first day of the Electronic Entertainment Expo (E3).
"The Japanese game market is now evolving around DS. We don't need to do something that will pour cold water on the situation"
This probably explains why the DS can now communicate with the Wii, initially Nintendo planned for the two machines to have no interaction. Nintendo have proved to us already that innovation can be better than graphics, I for one welcome the decision to stick with the DS.
Please note that while Mr Iwata pretty much said the GBA2 wasn't currently going ahead he didn't confirm these details. It seems safe to assume however that there wont be a GBA2, at least not for a while.