This is sad, but it is the right move for Apple and their business plan. For better or worse, things are all moving to the cloud. In the perfect cloud world, neither Time Capsule backups or AirPlay is necessary, since all of your stuff can be accessed and played from anywhere. Of course, this perfect implementation is a long way off (and may never fully materialize), but hanging onto stuff like the Time Capsule will only slow people's adoption and trust of the cloud. As much as I hate the cloud and the privacy issues therein, it is the way of the future for the general consumer (and we all see that Apple panders to the general consumer rather than the professional or niche markets anymore).
But how? No Airport. So we have to resort to third party wifi routers with their own set of issues, right?
I particularly loved one thing about Airport Express. It had a 3.5mm jack I used to connect my sound system to, and play music via the phone or tablet or MacBook from anywhere I was. That was Apple brilliance.
I don't know, if to date any other router has such features without looking or being obscene.