There are a TON of different stories about who pulled the plug on the deal, but at the end of the day the Lakers are better for not having CP3. As mentioned he has bad knees and probably can't make it through the compressed season intact.
Kobe had to go to a different country to get an experimental surgery done on his knees since it wasn't allowed here in the states. He is already just a shell of his old self, though he still takes way too many shots.
Artest, or World Peace, isn't the same player he used to be either. The Lakers got killed all season long by penetration despite having their 3 seven footers. The problem was that ball reversal and penetration into the paint was enough to beat the slow footed wing defenders the Lakers trotted out. People enjoyed blowing by Fisher, Artest and Kobe. The Mavs got open looks all series against the slow footed wing crew. CP3 does nothing to fix that glaring problem.
Then you compound the error by getting rid of Gasol (the guy who won their 'ship against Boston) and the matchup nightmare Odom? Ya he is streaky but those aren't two guys worth giving up for a short and injury prone PG. Especially when you are only left with Bynum in the middle, who despite being young can't put anything close to a whole season together. He is just a small step up from Greg Oden in the injury department. At the very least it left the cupboard pretty bare for trade bait to get D12.
This week of free agency is really making my head spin, and it has only just begun.