That quote strikes me as incredibly tone deaf. Not just the corporate speak of 'resourced' after laying off the team, but the utter lack of vision they have for the product. Delicious defined a category of webservices (public bookmarking) but to their eyes they aren't 'competitive'.
Yeah it's really terrible. The part about "we have determined that there is not a strategic fit at Yahoo" is laughable. I understand they can't just be honest and say "we don't know how to use it", but the way they phrased it conveys a sort of hubris that a company as poorly run as Yahoo should stay far far away from.