On the short term, I'm pretty sure that what they are doing is creating an upgrade path, away from Linux. Look at it this way:

Imagine you are running a business that has built stuff upon Mono. Mission critical stuff. Then, as your business grows, you are stumbling into problems. Scaling maybe, maybe some other limitation of Mono because of the fact that Mono contains only a subset of the .Net functionality. As a possible solution for this, Microsoft offers their .Net, with some proprietary extensions, that will handle your problems. Of course, you could do the same thing with Python or Java, but as you have invested so much into .Net already, you make your choice: you migrate off Linux to Windows.

That is what they are looking for: a cheap entry level solution (Mono) with an upgrade path to Windows (proper .Net)

Can we finally get that thing over here in Europe, please? ffs!

1. If you have a mixed server park (that is: host different applications too, other than Oracle's), migrating is *not* feasible. I'm not going to support yet another OS, just because it is *possibly* a tiny bit more convenient once it is set up. Because before it's set up, I'll need to have deployment mechanisms for another OS, management tools for another OS etc. Not worth it.
2. To extend my first point: Oracle's support might be a bit cheaper for the OS, my time is a lot more expensive than a thousand bucks worth of support on a years basis. That matters when having to support more OS'es.
3. Red Hat fixes the bugs, and then releases the src.rpm. Oracle has to Q&A that, port it, upload and release it. Updates for Oracle Linux will be (a lot) later than Red Hat's. See how much time it is costing CentOS to release 5u3. No offence, but for production systems, I want to have potential fixes *now* if the situation we're in is hurting us.
4. I'm just about to get RHCA certified. Can I get that level of Linux certification from Oracle? Don't start saying the OS'es are compatible, because they are not, see point 5 and 6.
5. The only thing Oracle can do on the long term, if fork RHEL. The amount of support, the changes they make and the fact they want to support until the end of time in the own way, might not be called a fork, but it will be just that in the end. So much for compatibility.
6. They ported yast. Need I say more?
7. Not really a business reason but check this out. Oracle announced Oracle Linux just a couple of months after RH scooped JBoss from underneath Larry's nose. One of the previous posts is right: Oracle is not trying to compete with RH. It's trying to get revenge. ;-)