The idea that the fans liked to think was that LucasArts was planning on spending huge amounts to market the game, and for some reason cancelled it rather than cutting the marketting budget. The truth is no one knows why the game was cancelled. Full Throttle 2, which was cancelled a few months before Freelance Police, was cut because everyone who saw it said it was terrible. However, FP was getting great feedback and so we will never know why it was cancelled. Perhaps LucasArts really did think it wasn't a good market for adventures and it wasn't worth the money to produce and ship the game, even though they'd be taking a big loss on the development.
I suppose Telltale can't make the game blatanly similar storywise, but I'm sure they'll come up with something good, especially since they're working with series creator Steve Purcell on the story and design.
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