I think so long as 2.0 maintains backwards-compatibility with 1.x (possibly include 1.x with the 2.0 app?), and it doesn't hamper at all from the user experience, a re-write might be a good thing. Or, allow easy plug-in migration from 1.x to 2.x (kinda like what Python did going from 2.0 -> 3.0).
There are plenty of examples where complete re-writes, or partial re-writes, have led to bad things. Windows Vista and Winamp 3.0 come to mind.
Good examples include Mac OS X, Linux 2.x (I believe this was a major re-write over 1.x - could be wrong as my Linux history isn't up to buff). Starcraft was completely re-written mid-development (originally it was built on the Warcraft II engine, which didn't scale).
I would tend to agree with you, though, that major re-writes typically yield worse things. But, that depends a lot on the product, its audience, and the developer. Perhaps Allan, who has likely been writing code for a very long time, knows of some bottlenecks and what-not that he feels should be incorporated into 2.0, which necessitates a total re-write.
If worse comes to worse, the 2.0 codebase bombs and 1.x continues going on strong. That's exactly what happened to Winamp 2.0 when 3.0 came out.
And I should mention, to clarify any possible bias in my opinion, that I'm a very happy Textmate user. :)