The real story here is not that a formerly reliable source backed off his claims under pressure, but that the White House has managed to turn the public and the media's attention away from accusations of abuse at U.S. detention facilities.
Despite the fact that the Chairman of the Joint Chiefs of Staff, Gen. Myers, said the article was unrelated to the violence in Afghanistan, the White House was able to redirect the spotlight away from the administration and its policies to Newsweek and potential "liberal" bias in the media. No administration supporter has been able to mention the name Newsweek without adding the words bias or propaganda for a week.
The administration chastised Newsweek for a culpability that even the top military commander denied exists, and the mainstream press (from NPR's Daniel Schorr to CNN's various anchors) has dutifully followed, writing breathless stories about Newsweek's guilt or innocence and the questionable role of confidential sources. Commentators and editors are falling over themselves to state that they will continue to hold themselves to a higher standard than Newsweek, lest they end up on the administration's bad side.
By turning the focus of the media back in upon itself, the White House has assured that editors will take even greater pains before printing controversial articles. In an administration that places secrecy and loyalty above all else, some of the only insight we will gain into internal debates or access to potentially illegal or unethical practices is through the use of confidential sources.
The administration has managed to turn attention away from its own policies and in the process has ensured an even less aggressive media.