Well, maybe. But keep in mind that the City Funding Agreement and the State Funding Agreement, both of which were signed during the optimistic economy of September 2007, give the developer a much longer leash to build a much smaller project that the December 2006 state approval seemingly enshrined.
And it could be argued that megaplans are ruined by their "mega"-ness and the lack of democratic process.
In other words, a somewhat less ambitious plan, involving multiple parcels and multiple developers, going through (rather than around) the city's Uniform Land Use Review Procedure (ULURP), would not have generated such opposition and could have led to development (though, most likely, not an arena.)
Project isn't dead
Keep in mind that, despite an alternate headline, "The Fall of the Atlantic Yards Megaplan," the project is far from dead. The overoptimistic megaplan may be dead, but Forest City Ratner is hoping to get a new arena started, so there might be a way to stave off losses on the Nets.
Also, the timeline is rather arbitrary, having left out such milestones as the overhyped 6-8% scaleback (NYTimes, front page!) and the December 2006 Empire State Development Corporation and Public Authorities Control Board approvals.