This is absolutely true. SGI was trying to decide between shutting down Cray BSD entirely or shunting it off to Sun -- who was really the only possible buyer (their product was based on SPARC and Solaris, even when at Cray). So SGI wasn't going to make a nickel off of that product, and as such, it remains one of the best acquisitions in the history of the industry: purchased for less than $10M (I'm not sure the exact figure was ever disclosed), that product line did $1.2B in top line in its first year at Sun -- and it's hard not to have fond memories of that year. (Speaking personally, debugging a nasty performance problem on an E10K in December of 1997 helped to directly inspire DTrace[1]; I will always remember that machine fondly, despite its many quirks.)
Right. Selling to Sun was the right thing for getting some nice hardware out there. Just saying, it gave Sun quite a competitive edge - probably bad idea from a business perspective. I was at Sun in that timeframe too, but not working on the E10ks :-)...
[1] http://queue.acm.org/detail.cfm?id=1117401