I think its more like Sun dying then just their OS. Linux will allow them to reach the entry and mid level server market better. They may not make money on their trademarked OS, but at least they can sell the proprietary hardware and keep production cost down for it. Its the same as what IBM did, but many years late. I really don't see Sun surviving on its own for much longer.
I'm still not entirely sure what the allure of running Linux on Sun hardware is. Solaris rocks on their own hardware an is extremely stable.
$ uptime
12:34pm up 1221 day(s), 20:44, 1 user, load average: 0.00, 0.02, 0.02
$
Granted, the above is an internal webserver without a hell of a lot of load on it, but 1221 days is good in anyone's book.
I can understand making Solaris available on Intel hardware, as it allows folks who work with Sun hardware to have an inexpensive way to have Solaris available on a workstation without the expense of a full-blown Sun Server.
Why would anyone run Linux on production Sun hardware?