Update: There has been a little confusion. The web browser, Firefox, is still going strong. In fact, they're focusing their engineering efforts more on it, by cutting back on these secondary projects.
Less than a year after their decision to stop developing and selling smartphones through carriers, Mozilla has decided to end all commercial development of Firefox OS. Releases after Firefox OS 2.6 will be handled by third parties, such as Panasonic, should they wish to continue using it for their smart TV platform. Further, source code for the underlying operating system, Boot-to-Gecko (B2G), will be removed from their repository, mozilla-central, so it doesn't hinder development of their other products.
Regardless, Mozilla needs to consider their long-term financial stability, and throwing resources at Firefox OS apparently doesn't return enough value for them, both directly and for its impact on society.