This tweet by Brandon Watson, a self described “Entrepreneur on loan to Microsoft focused on getting our developer mojo back.” leads me to believe that they are serious.
Reading through his recent tweets, he seems pretty into backing the product, and the homebrew dev community.
This seems to place WP7 firmly between iOS and Android in terms of control. Apple has twenty foot brick walls with boiling oil at the ready, MS wants their stuff to work, but isn’t afraid to let someone else do the tooling, and Android is the Wild West: Use common sense or you’re gonna be dead by sundown.
Don’t forget that MS is already hosting the Dev Team that jailbroke WP7.