During a Q&A, Martin Fuller said that the plan was abandoned in the early stages, and that he really couldn't give any details as to why. He added that he knew of no future plans to develop the program further.
http://www.digitalspy.com/gaming/news/a583173/microsoft-no-longer-plans-for-xbox-one-retail-units-to-double-as-dev-kits.html#~oJxRgD679LzzPh
Update: The story has now been updated to reflect new comments from Microsoft denying the comments from Martin Fuller, and promising more updates on the program to come in the future.
Honestly...
Oh, Microsoft. If you announce a merger with Eggo later this year, I will not at all be surprised.