The Ubuntu One Blog:
Today we are announcing plans to shut down the Ubuntu One file services. This is a tough decision, particularly when our users rely so heavily on the functionality that Ubuntu One provides. However, like any company, we want to focus our efforts on our most important strategic initiatives and ensure we are not spread too thin.
Thomas Brand makes a valid point about the closure:
Just goes to show you every platform doesn’t need its own cloud file service. Especially not the creators of a desktop Linux distribution, whose users probably already have a cloud service they prefer. If I was Canonical I would back a winner like Dropbox, and work with them towards developing tighter integration with Ubuntu.
Competition is great for innovation but there is a limit. Ubuntu One offered nothing beneficial over a competing service like Dropbox.