I'm not sure it's entirely the economy. I've heard rumors for 2-3 years now that 1up was on the chopping block and it was just a matter of finding a buyer. If the scuttlebutt is to be believed, then for a long time Ziff-Davis was trying to sell everything to MTV but the deal somehow fell through. I'm not sure exactly what the source of the problem was, but I've heard it had to do with a tremendous amount of debt Ziff-Davis picked up about five years ago or so.
EGM has blown for a while now - GameInformer is a vastly superior product.
You kinda could see this coming though, what with the last two months being movie tie-in games on the cover (Watchmen and Wolverine). They were obviously just trying to sell magazines in desperation.
Welp, this is another gaming site going down the tubes. Thanks, UGO!
Green's post is heroic. He stated the entire situation very bluntly, though he seems more optimistic about UGO's own lack-of-style not influencing 1up's future content than I am.