I thought it was pretty clear from the Paizo forums that Paizo was not offerred ANY opportunity to renew the license. Wizards decided this unilaterally. Paizo has to refer to the situation as amicable as they have no grounds for complaint other than their disappointment. Wizards acted within their rights. This amicable breakup is more akin to renting a house for a few years, when suddenly the landlords send you an eviction notice with appropriate advance notice. You have to move, it may suck, but you can't sue the landlord.
This analogy seems to go further, since Wizards didn't ask for more money, they weren't looking for more money. The cancellation was done to strictly remove the competition. So in the rental analogy Wizards has just evicted everyone in houses, so that people will have no choice but to live in apartments.
In all of this Wizards is attempting to promote their interests as a business, namely profit. As legitimate as this is for them, to make decisions based on money, as a consumer I can be equally legitimate in expressing my disgust with their decision. I am not required to base my decisions and opinions on what is nice for Wizards. Wizards is simply gambling that they will have a better revenue stream this way.
I believe this is ultimately bad for everyone. Wizards has vastly underestimated the value that the magazines add to the property.
Alternatively Wizards has done this intentionally, knowing that it will damage the current market (especially when 4e finally shows and there are no print previews available at all) but are planning to abandon this market by then. The D&D brand may be moved to areas that they believe are more profitable.
Either way its bad for gamers. When something bad happens to a consumer in capitalism it is essential for them to express their frustrations in more than personal spending. So here I am saying that this move will probably be labelled one of the worst decisions in the history of D&D. I could be wrong, but I doubt it. In 10 years this could work. Today, no way.