The loss has caused at least one sports book (Betfair) to lengthen Federer's odds to win the 2011 US Open as the five-time champion at Flushing Meadows is now priced at 57/10.
The loss is definitely a setback for Federer as he had made the final at the Canadian Masters last season, and as a result of his round-of-16 loss this season, he'll turn a net loss of 510 points in the ATP's ranking points column come Monday.
He will still be ranked third with next week's update, but in the longer term, you have to wonder how long he'll stay in the top three.
Federer has a big title defence coming up next week as he now shifts his focus to the 2011 Cincinnati Masters.
Federer has a full 1,000 ranking points to defend in Cincy and then 720 to defend in Flushing Meadows, and, really, you have to wonder if he's going to duplicate either of his results from last season.
In the even longer term, Federer has nearly 1,000 ranking points to defend at the Shanghai Masters and the Paris Masters combined. He also has 2,000 ranking points to defend at ATP Basel and the ATP World Tour Finals combined, two events that Fed won outright in 2010.
However, the world No. 3 can't really be expected to defend either of those titles simply because Novak Djokovic will be in both tournaments.
If Andy Murray bounces back in Cincinnati and then has a strong US Open, a tournament in which he lost in the third round in last season, he could set himself up to overtake Federer in the rankings by the end of the ATP season.
Time will tell, but Federer is continuing to lose favor with tennis punters, and having turned 30 earlier this week, he can only be expected to get worse on tour—not better.