Indeed, this is very disappointing to hear. Despite what they say, I don't think this issue is over. There will be much protesting before anything is fully resolved.
However, the way it is looking right now, there's no chance PJ and Fran will ever be involved with The Hobbit. I do think there is a director somewhere out there that can handle this project, perhaps another loyal Tolkien fan. The mystery is whether New Line will find and hire that "right" director. The Hobbit won't be the same without PJ (and most likely not nearly as amazing as LotR), but after the success of LotR, New Line and the new director will be careful not to completely screw up the film. Also, if majority of the crew of LotR decides to get involved with The Hobbit, a certain element from the previous films will be kept. Personally, I could not bear to watch The Hobbit without the same design team and Weta. Weta did such an excellent job- no other company could do The Hobbit justice.
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Nolite te bastardes carborundorum
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