Vala is still there. I can't speak for those guys but if I were to guess I'd say they didn't pick Vala for 2 reasons:
1) It's not "done" yet. There are still some TODOs on Vala. Although it's obviously mature enough that people are using it for complex stuff, I guess they wanted something a bit more "mature"
3) Perhaps because of all the C#/Mono in GNOME outcry, they wanted to avoid that flame war in favor of fresher flames.
One only wishes we could see/hear/read the full discussions that went preceded the decision.
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