In a complete report on the situation, Matt Snyder of CBSSports.com notes that the deal fell apart "as constituted," which does not mean that it's dead entirely. The Angels and Indians could always rekindle talks and come to some sort of new arrangement.
If that happens, it's safe to assume that the Angels will be the ones who try to kick-start the talks again. Heyman said it best on Twitter:
#angels can't be pleased abreu/indians deal fell apart. They know they need to move him.— Jon Heyman (@JonHeymanCBS) March 30, 2012
The Angels need to move Abreu, of course, because they basically don't have a spot for him in their lineup. He's not an everyday outfielder anymore, and things are crowded enough in their outfield with Vernon Wells in left, Peter Bourjos in center, Torii Hunter in right and uber-prospect Mike Trout waiting in the wings.
Abreu could DH, but the Angels need to make sure Kendrys Morales and Mark Trumbo get at-bats.
Among the three players battling for DH time, Abreu is the most tradable. He's getting up there in age, but he can still swing the bat, and he's only on the books for $9 million.
If the Angels agree to pick up a good portion of that, Abreu could easily be moved.
My best guess is that this is what killed the deal to the Indians, who presumably weren't all that interested in paying Abreu a lot of money. They would have been acquiring him as outfield and DH insurance, not as an everyday player.
Abreu has always been a professional, but things are only going to get more and more awkward the longer he stays in Anaheim. The Angels need to move him sooner rather than later.