That was the view arrived by its Board of Trustees, the public's overseers of one of the world's leading broadcasters.
They cited commercial reasons, the damage it will have on the commercial sector and regional newspapers as a principle reason.
The decision greeted by the UK's regional press with a degree of relief and delight should also be tempered with some caution.
When I posted recently on this, many including me, were certain the BBC would get the nod.
The press had indeed geared up to take a BBC endorsement to the high court.
Reported by the Press Gazette, two months ago, BBC Trust chairman Sir Michael Lyons said:
"There's nobody who can be satisfied with the quality of local news in most parts of the United Kingdom," Lyons told a Broadcasting Press Guild lunch in London this afternoon.
"The local press has nothing like the strength that it once had. It's not the same proposition that it was 15 years ago. Will the BBC make it better or worse? That's exactly the issue to be explored."
Is this the End
The BBC's supposed £68m investment over four years for 65 local video broadband hubs will now have to be shelved.
Sir Michael is reported to have said he 'personally hopes' that the decision they've come to gives the regional press room to sustain its business and improve its own video initiatives.
It appears the Trusts' own research from license fee payers seeking greater improvement to existing TV and Radio services and a cap on expansion plans in these constrained economic ties was the crux to the decision.
However inside the Trust, some do acknowledge that the BBC's video scheme could have been a powerful service.
But I believe unless regional press up their game, the next approach may not be so easy to fend off and indeed may not come from the BBC.
Invest in Video
At a meeting in Podgorica, briefing newspapers seeking to enter or expand into video online, there is a strong consensus from a body of media experts.
Vin Crosbie and Craig Neable from Zattoo Europe spoke about the growing interest from telecommunications companies to acquire content for their expanding networks.
In the US Verizon has already moved into this area with VJ Pioneer Michael Rosenblum at the helm of a number of initiatives.
Professor Vin, from the SI NewHouse School of Public Communications has urged newspaper groups to grasp video, claiming US newspapers failed to invest in video and new social web technologies to stave of their current worries.
I'll bring you video and more comments on this tomorrow.
David Dunkley Gyimah has been consulting for the Press Association working with the UK's regional press since 2005
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