So it seems like the claim for bacteria using arsenic in their biomolecules was never strong to begin with. During the original press conference, the token skeptic was a chemist, and most of the criticism comes from those who are convinced that the chemistry of the matter is quite unlikely. The bacteria are not 'thriving' on arsenic, by any means, but merely tolerating it.
The original paper claimed that only a fraction of the phosphorus was being replaced by arsenic, but it seems likely that as other labs try to replicate their results, this value will be revised downwards.
Red faces all around - including this one! - for feeding the hype, and many people are pointing to NASA's infamous 'life on Mars' claim as prior precedent for the dangers of mixing science and the media.
The authors released a technical statement responding to criticism on methods (pdf original, html version on USA Today)
A good newsy summary from the Philadelphia Inquirer.
Ed Yong at Discover Magazine summarizes the timeline and reflects on the practice of science journalism.