There are several ways to look at this.
You could say--if you were a starry-eyed believer in the Obama campaign speeches of a year ago--that the so-called "public option" was already a compromise from a pure single-payer plan, which is the holy grail for the left. So this is a compromise of a compromise, or in other words, a sellout.
Or, you could say that Barack Obama is a pragmatist, and that by abandoning one of the cornerstones of his health care reform plan, he is merely acknowledging reality. A partial loaf is better than nothing at all.
I can appreciate Obama's realpolitik, particularly since health reform has been staked out by all sides as a make-or-break issue for his presidency. If your entire credibility depends on getting something--anything--passed, it's better to pass an empty shell so that everyone can declare victory and maybe flesh things out later.
As we all know, government programs are virtually impossible to kill. They develop constituencies that tend to vote as self-protective blocs. They are much easier to fatten over time, like a Christmas goose. If you want to be cynical about it--and there is always a large component of cynicism in any White House's strategy--just getting the framework in place is enough to ensure a thriving, growing bureaucracy as well as mission creep.
Give it a decade or two, and even conservatives will be fighting to protect the National Health Care we have come to accept as an American birthright. Have you ever seen one turn down Medicare?