I'd like to point out a few things about SW:TOR's current situation that I think are worth considering in this discussion:
A matter of numbers
The problem with the numbers we're given here though is that as far as we know, the 1.3 million active subscribers includes those who are on a free month because of the April promotion. How many of those are planning on re-subscribing is not something anyone can know at this point in time, but it will be interesting to see come the end of May.
Basically, what I'm trying to say here is that the numbers we've been given are not very useful for judging the health of the game. Having got that all out of the way, with the information we've been given...
Not the end of the world
The game still has 1.3 million subscribers. Just think about that number for a moment. Yes, it is less than "that other game". It is also more than every other MMO besides that other game. This game, by average industry standards, is a runaway success.
This makes the game profitable and means that it will continue to be supported by Bioware. If you like SW:TOR and are going to be continuing to play it, this news doesn't mean much besides whatever impact this has had on server population. In any case, the impact to server population had already happened when the population numbers were announced, so it's bascally moot.
The coming storm
As you may or may not know, patch 1.3 is slated to be mostly a "game systems"-type patch. We'll get a dungeon finder, and possibly other quality of life features. We'll get an expansion of the legacy system. There won't be any new content in terms of PvP or PvE, though.
I personally wonder if this isn't a huge gamble. The dungeon (or flashpoint) finder is definitely a highly-requested feature, but is it enough to pull people back into the game and/or retain existing subscribers? Will being able to find groups easily suddenly make people want to run mostly-outdated content (Lost Island and Kaon excepted)? Again, I will be interested to see it.
In any case
I personally love this game, and will be sticking with it for a long while. Even if the game were to lose another 400,000 subscribers, Bioware would still be deriving a profit from it, and we'd still see updates. Still, it does worry me a bit that subscribers have dropped off as much as they have. What do you think?