Google has said they have something like 10k Angular 1.x apps, so they will keep on working on Angular 1. Angular 2 happening along this support is showing that they're willing to invest in the conservative route and the "burn down the libraries" route at the same time.
The so called upgrade path they offer for Angular 1.x is a complete joke. That you can "mix Angular 2 into your existing Angular 1 application" would be a true statement with any component-oriented framework in place of Angular 2, like React, and Ember. And this was not true for Ember just a few months ago, which is living proof that gradual improvement can in fact be accomplished with any framework, but of course, throwing everything away is much easier, so the framework developers need to have strong incentives to not do so.
If Google was as invested in Angular as Facebook was in React, they would probably have gone with a more gradual, methodical approach to improving the framework (like the Ember team did). And until that changes, there is very little stopping them from doing another mostly incompatible rewrite in a few years.
As it stands, Angular 2 is closer to a completely new framework roughly inspired by Angular 1.x than a new version of Angular.