Eh, that's pretty short sighted. His ratings would have never recovered in that slot, which is the biggest issue, and Fallon would have gotten royally dicked as well. Plus Conan is apparently sentimental about the brand, which was even on display last night, and I think the concept of another show going in front of The Tonight Show was appalling to him. Essentially, you have demoted The Tonight Show at that point, which is something he couldn't deal with.
I pretty much agree that this ends his career, though. He can't recover from this.