Craig, as I see it, the proprietary technology that SanDisk needed but didn't have was Intel's double density technology. Cross licensing SanDisk's patents for Intel's double density was very much analogous to opening Pandora's box. Also, there were other types of flash memory produced by several other companies that adequately served different markets, limiting the applications of SanDisk's proprietary technology mainly to digital cameras and other applications involving removable flash cards.
It is now apparent, though, as you note, it was not apparent earlier, that SanDisk has become a commodity producer. To be fair, one would have to admit that there really was no other choice. I do not believe the direction the company is taking has anything to do with golden parachutes, which occur when a company is to be acquired at great advantage to its top executives. Also, it should be noted that just because a company doesn't have an intellectual property lock on a particular technology doesn't mean the company can't make money. For years Intel tried to protect its microprocessor technology from what looked like near copies being produced by Advanced Micro Devices. In the end, AMD succeeded in making competing products without infringing Intel's patents. Both companies made money because the market for PC chips was very strong until last year. Both companies also continued creating proprietary technology, making possible higher performing chips at lower prices.
A similar situation appears to be taking place in the market for removable flash memory cards. This is, in my view, why SanDisk characterizes its relationship with Toshiba as "very important." In effect, SanDisk is saying that its joint FlashVision venture will assure the lowest cost chips, allowing SanDisk and Toshiba to share the profits jointly. I'd rather see two friends share profits than two enemies compete for them.
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