Why? As Google said, it "is not having the broad impact that we hoped it would." Therefore they are shutting it down. I am not surprised, in fact, I expected it. I did not think when it launched Google would close it, but someone recently asked me about Google Health and I told them, I wouldn't be surprised if they closed it down within the year.
Why? You never hear anything about it. All the main Googlers in charge of the project either left the company or were migrated to new places. So it comes with no surprise that the announcement was made in 2011. Especially after the official FTC probe - I mean, it can't hurt to turn that off now.
The date it will go offline is January 1, 2012. If you are one of the few using it, you can download your data. To do that, see here.
Forum discussion at DigitalPoint Forums.