This is good. Really good. Because this will drive more people towards AMD's video cards. This will also make those who are contributing to getting AMD's video cards working well in Linux redouble their efforts. This is essentially the beginning of the end for NVIDIA. Yes, it is a good business decision for them in the short term, but a VERY bad one for them in the long term and somebody high up will be paying the price a few years down the line because it was their call.
So I say again, buy AMD and make the AMD drivers better than the binaries that NVIDIA is shipping. Take away the reason for anyone who is using Linux to buy NVIDIA. Keep competition alive and support companies that support open source. Whether NVIDIA sees it or not, Linux's mind share is going to increase by an order of magnitude over the next couple of years simply because of smart phones. More people are also going to be running it as their desktop, in particular the mum and dad types who just want to browse the internet on cheap hardware and not worry about viruses.
Again, the reason I say this is good is that this is an opportunity for us, the open source community to show companies who are watching from the sidelines, what a difference supporting open source can make. Use your coding skills. Contribute. Help AMD and others who support Linux and open source. We can make a huge difference to a company's fortunes. Flaming NVIDIA is not going to help. Contributing to make sure the competition's products work so well that there is no need for NVIDIA's products is.