This has been in the works for quite a while and there is more to it than what Dave has revealed.
The PIC firmware for the Dragon is just a temporary hack. The Dragon has been an unreliable POS and will be EOL soon. The new low cost programmer will the the PICKit4 - and it will program everything.
Microchip will soon announce (along with the PK4) a line of 8 and 16 bit PIC chips that are pin compatible with the AVR atTiny atMega and XMega chips. They will assist current Atmel customers with the transition to these new superior PIC chips. When the transition is complete, all AVR chips will go EOL and no longer be manufactured.
The AVR never met sales expectations, and this is Atmel's way out of a money losing microcontroller product segment.