Assassin's Creed: Lost Legacy had Ezio Auditore leave Italy and travel East on a quest of discovery to locate the castle of Masyaf, which if you remember, was Altaïr's training ground in the original Assassin's Creed. It turns out that the concept for Lost Legacy was apparently so awesome that Ubisoft just decided to scrap the 3DS game altogether and turn it into Assassin's Creed: Revelations.
While that in no way means that there won't ever be an AC 3DS game, it just means the Lost Legacy is definitely not going to be it. Now we know why it was canceled!
Thanks, Joystiq!
