Wait ing for a more reliable source, but:
Man in negotiations in had to compromise with people he was negotiating with shocker?
Cameron has been breath-takingly incompetent in Europe from before he was even Prime Minister. It's no great surprise that he had to scale back his ambitions to something with a faint hint of reality. Freedom of movement is one of the fundamental grounding principles of the EU; the other 27 nations aren't going to abandon it because Cameron made a silly promise he can't keep.
In reality, the fact that Cameron had the sense to run his demands past some of the other EU leaders before embarrassing himself on the international stage is to his credit. It shows at least a basic understanding of international diplomacy.
(Incidentally: is it IDS or the Sun you're describing as an unreliable source? Or both?)