Great move. Good for him. I remember reading about Obama's plan for missile defense during the campaign; I actually read his position paper on his Website. If I remember correctly, he was supportive of it. I was a little surprised, but that I realized that Obama was probably thinking of missile defense as a bargaining chip with the Russians. He was pretending to be in favor of it, so that he would have something to give away when negotiating with them.
But this particular missile defense program was a terrible bargaining chip with the Russians, because it pissed them off so much. Bush argued that this was designed to protect Europe against Iran. Russia didn't buy that, neither did I, and neither did almost anyone else in the world. The geography is just ludicrous; Poland is a long way from Iran. And why would the Iranians want to send missiles into any European country? Why would the Iranians want war with, say, Germany or England? Those are NATO countries, so all other NATO countries would be obligated to respond. Any attack by Iran on any European country would be completely insane. First, Iran would be toast, and second, what would Iran possibly gain from such an attack? They certainly aren't going to take any territory from Denmark.
The Russians saw this missile defense as a thinly - and poorly - disguised defense against them, and, in effect, a revival of the Cold War. This was incredibly insulting to them, and for good reason. Of course, Bush didn't care about making the Russians mad. If they yelled, it just proved that he was doing something right.
What I'm sure Obama realized is that the Russians did not want to negotiate over missile defense because to do so would have meant that they would have recognized it as legitimate. Which they absolutely did not want to do. For the Russians, putting in this missile defense was essentially an act of bullying by the US. For them to include it in any kind of bargain would have meant acknowledging that the US could threaten them with impunity, walk away, and then do it again. That's intolerable to them, because it makes them look weak.
So Obama by withdrawing this missile defense plan, Obama gave the Russians something they crave above all else in international relations: respect.
Of course, the Russians are not alone in that. Every country wants respect. It's particularly important for the Russians because Russia is still by far the largest country in the world, with vast resources. The Russians feel that they deserve respect in large part because they do.
Obama is treating the Russians like adults. He is sending the signal that he is not afraid of them, he will deal with them from a standpoint of equals, rather than out of fear, and he will not let his insecurities - or the insecurities of a few chickenhawk conservatives - determine American foreign policy.
Some will argue that Obama gave something away without getting anything in return. I disagree. Obama was never going to get anything from Russia in return for missile defense. What Obama gets - what the entire world gets out of this decision - is a world with a little less fear.