Whatever Nokia did was going to be a rough transition. Their market position had a good deal of S60 inertia behind it - app installed base and user familiarity and the like - that would've gone out the window no matter what the switch was to, Meego, Android or Windows Phone. It's hard to say that Nokia's killer hardware with Meego would've done much better - or worse - than what the Windows stuff did. I think it would've gone better but not great for them, personally. (having owned and enjoyed an E71, an N97 and an N800)
That's the beauty of the memo, and the strategy. You can construct a plausible argument that Elop actually believed it and was acting in good faith. He wasn't, of course, but it'd be hard to prove that he didn't really believe WP7 was somehow the way to go.