Retirement is what the BBC and other websites are going with, but yeah, there's nothing stopping him coming back and racing in F1 again another time.
It's a shame to see him leave in one way, but it also makes sense that he at least wants to take a break from F1 after the last few depressing and exhausting seasons suffering from Jacques Villeneuve Syndrome, and concentrate on trying to complete the Triple Crown. I can imagine that if he manages to win the Indy 500 in the next year or two, his interest in F1 will be reignited, as he would consider it unfinished business as well as feeling more fresh again after time away.
He could also use the next year or two to "do a Prost" and manouvre himself into a more competitive seat with a top team behind the scenes for an F1 comeback. But somehow I get the feeling this isn't him leaving F1 for good.
Whatever happens, I think he's had a pretty unforgettable F1 career, as it's been an exceptionally entertaining and polarising one.