Everyone involved is stressing that Bioshock is not being abandoned like Halo was, but just restructured and refinanced in order to come in at a lower budget. The studio also froze Ridley Scott's Robin Hood, allowing it to be rewritten from that Nottingham idea, and come in with a $130 million budget. (We also got State of Play out of the deal which is kind of nice.)
I suppose the big question is whether a tighter budget will make a better Bioshock by forcing the creative team to rely on story and not special effects, or whether it will actually hamper the adaptation by saddling it with cheesy CG. I still haven't played it, but I constantly hear about the look and design of the game. It'll be a shame if that's compromised.