I personally don't think the Nexus One was a flop at all but I can see why some would think that way. The sales model clearly wasn't as successful as Google had hoped but it had more to do with lack of sales support and technical support then it did with the device itself. The device is wonderful and still stands (until the Nexus S hits the shelves) as the preferred device for most developers.

With that said, Andy Rubin got quite candid during this interview where he talked about the things that Google did wrong and why they've dropped that model and instead put more concentration and man hours into developing the OS as opposed to selling the phones.

It's a good read and you can check it out at MobileBeat.