According to James Barnes (whose job description includes legal analyst at Party Gaming), there never was any real intent by PokerStars to purchase FTP. From his Twitter, which has been retweeted like 50 times already:

James Barnes‏@JamesBarnesEsq

Pokerstars folds on FTP deal. Never real deal, just bluff to prevent Tapie from bringing FTP back to market - great bargaining chip with DOJ

DOJ have rejected proposal by Isai to have civil charges dropped. He's worried about jail time. Pokerstars have gone all-in! Will DoJ fold?

@_tizzle I'm afraid I can't divulge source or go into detail, but I stand behind it. And TBH not entirely surprising! ‪#FTP‬ ‪#PokerStars‬

You can breathe a sigh of relief:

Andrew Feldman‏@AFeldmanESPN

The Head of Corp Communications for @PokerStars @erichollreiser says the Twitter rumors of PS folding on the FTP deal is "false"

So Stars is going to buy FTP? And do what, make it a "skin" on the Stars network? lol
Or maybe they'll just get all the Full Tilt pros to represent them and be able to use all their nice software and formats.

The general consensus is that they would basically prevent the one software platform that was able to compete with them from falling into someone else's hands. At the same time they would be able to settle the $2 billion civil suit they are facing by coming to an agreement with the DOJ over player repayment and such. The rumors haved both sites operating independently (which would allow them two sites in every legal market)