It was at risk of ending up like PHP (in more ways than one). the core team recognizes that the API needs a trim. I also no longer use jQuery and haven't in a while because of the bloat.
but I think the way they are approaching it is wrong. They want to trim the API by 10% for the next -1.8- (edit: 1.7) release. This would break semantic versioning[2].
I think they should fork the code now with a new 'jQuery 2' branch and not break any backwards compatibility in the 1.x branch. The 2.x branch should be a complete re-org with browser support as modules (for eg. if you want to support IE 6.0 you enable a module, etc.)
For now, the jQuery light branch should be optional in 1.x. There are analogies in this approach with what PHP did between 4 and 5, and what Python did between 2 and 3. jQuery shouldn't be stripping out API functions in point releases, but it definitely, definitely needs a trim (and I would rather this work is done on the mainline jQuery project rather than in forks. I think a lot of devs at the moment have forks of Zepto/jQuery they run (i do)).
this project may be the perfect starting point for a jQuery2 branch. i'd definitely be interested in working on that project, and bringing in features from all the various forks and cleaning it up.
[1] http://blog.jquery.com/2011/11/08/building-a-slimmer-jquery/
Edit: the deprecated API functions are planned for v1.7, not v1.8 - which means soon. I think it will cause a mess for people who auto-upgrade.