I think it is a negotiating tactic by Al Baker to put pressure on Airbus. The problem with the A320neo is in the engine, so another option he says he is pursuing is to swap the engine selection on the A320s from the Pratt&Whitney to the CFM engines.

Just clicking through to your link, I can't see the full article on the WSJ. However the headline is a little misleading. They have only cancelled the order for the first aircraft, not the rest, yet.