This isn't really true.....
I agree it *appears* like Apple did this. BUT, the thing many people don't seem to realize is that the current crop of hard disk based camcorders and digital still cameras with a "movie mode" store their video data in a whole new, proprietary format that was never used before.
This format pretty much requires a whole new piece of video editing software, in order to allow importing it properly into a format suitable for editing.
(Even Final Cut Pro, with all of its flexibility and ability to handle numerous video formats, imposes a number of limitations on working with data imported from these types of devices.)
iMovie '06 and earlier were designed around the idea of importing data streams from tape-based camcorders, just like Final Cut always did.
iMovie '08 is a whole new product that DOES allow working with these flash memory and hard-drive based camcorders, and still having full editing capabilities. I think that's REALLY why people feel they've "lost features" they had before and are upset.... The lost functionality is mainly due to having to do a complete rewrite and approach the video editing from a different way, to accommodate newer cameras and their formats.
I wish Apple clarified all of this from the start, though. They probably should have called the product something other than "iMovie '08". In reality, they needed "iMovie '06 for tape-based camcorders" and "iMovie '08 for HD/flash-based camcorders", side-by-side in the apps folder.
The price cut proves they intentionally ruined iMovie 08 so they could drive sales towards finalCut Express.