His CPAC speech today apparently turned into a withdrawal speech. Key passage:
I disagree with Senator McCain on a number of issues, as you know. But I agree with him on doing whatever it takes to be successful in Iraq, on finding and executing Osama bin Laden, and on eliminating Al Qaeda and terror. If I fight on in my campaign, all the way to the convention, I would forestall the launch of a national campaign and make it more likely that Senator Clinton or Obama would win. And in this time of war, I simply cannot let my campaign, be a part of aiding a surrender to terror.
One thing you'll probably hear a lot as the pundits pick this over is that Romney wants to "preserve his viability" (not to mention his bank account) for another run. That's not a bad move given that: a.) the Democratic nominee will enter the general-election campaign as a huge favorite, and b.) even if McCain wins, there's a much higher than usual chance he'd only serve on term. You might also add c.) The general will give Romney a chance to show he's a good solider/loyal party man, and d.) By the time conservatives have been through an entire campaign with McCain, Romney may look pretty good.
Also, I'll say more on this when I have more time, but another thing you're going to hear a lot of is that Romney screwed up by running as the conservative standard-bearer rather than as a wonky pragmatist. I disagree, for reasons I got into a bit here. Quickie version: There's little evidence that Romney's wonky-pragmatist persona was catching on. And, while you can argue that it might have had he not changed his story so many times, my hunch is that it wouldn't have provided enough of a base to win the GOP primary.
My feeling is that he needed to do a better job selling his evolution as a conservative, and in such a way that didn't undercut his technocratic selling points. That's a tall order, I know. But I think it was his best shot. (Which is to say, the Romney people had more or less the right idea, they just didn't execute as well as they needed to.)