If Valve thought that the technology had a future, they would have kept it or spun it off.
What they did is much smarter. Either Ms. Ellsworth & co manage to make a marketable product with the technology, and Valve can either buy them out outright, or invest in them (because, hey, who is a better purchaser for your company than the organization that sparked its creation in the first place?). Or Ms. Ellsworth fails and Valve has no skin in the game. It is a much better and a lot less riskier idea than letting the technology stagnate within Vale, or throwing good money after bad.
Thank you for pointing that out.
Also letting them go on a friendly note, will guarantee in the future that they will join Valve and not some other group.
What they did is much smarter. Either Ms. Ellsworth & co manage to make a marketable product with the technology, and Valve can either buy them out outright, or invest in them (because, hey, who is a better purchaser for your company than the organization that sparked its creation in the first place?). Or Ms. Ellsworth fails and Valve has no skin in the game. It is a much better and a lot less riskier idea than letting the technology stagnate within Vale, or throwing good money after bad.