How's is it fragmented at all?
Wp7 phones aren't upgraded. Ms gp have set screen resolutions and hardware.
Android on the other hand haven't set anything, many apps just lag on cheap phones and there's loads of apps that don't work on the majority of phones, there's even some apps that only work on a handful of phones.
You can say a lot of stuff about wp8, but I can't see how you can call it fragmented at all.
As for upgrades, it's likely wp7 devices simply can't support wp8 properly. They needed the clean cut. Going forward ms have allready announced phones will be updated from MS(rather than phone manufactures, again removing yet another fragmentation opportunity) for at least 18 months.
Ie10 is exceptionally good, I've ditched Firefox in favor off it. As far as I have read the metro ie10 is exactly what we are getting in wp8.
You won't devlop for both platforms, you will devlop for win8, wp7 is to small and a dead platform. Frankly a developer who developed for that rather than w8 would be very short sighted, some might devlop for both however. Devlop for w8 and you have the shared kernal and its very easy to port to win rt and w8, opening your app up to 10s of millions more devices.
I don't see it as a slap in the face really, people on wp7 have had them for a long time, even the experts and analysis are saying it doesn't matter and that certain media articles are overhyping. Most people get a new phone when their contract is up anyway, making it redundant. The few like me who keep hold of the phone for potentially longer, is quite a small percent.