Faeldawn
Its not been dropped at all, its just struggling to find people to pick up the game full time (Cryptic have it right now.)
personally I think they are going about it the wrong way with taking on too much to soon. Yes it would be nice to have ship AND planet combat but right now nether are very good. My thoughts are doing it similar to SWG and perhaps have an expansion for space combat but alas its fallen on deaf ears. The problem you will have with making a space-based MMO is EVERYONE will be captain of a whopping big ship and it will end up being Eve with a Star Trek skin job.
I'd post pic's but then I'd probably get shot

... by
a phaser no less