Oxford have only ditched some hyphenated word-groups, hopefully where ambiguity is unlikely. There's a difference between a smart arse and a smart-arse.
I generally try to be as backward and stuck in the past as I can with English, simply because the new things people want to introduce as generally crap. However, this does actually seem like a good cull. While obviously, as pointed out by cpemma, there are some cases where the ol' hyphen is still a neccesity, there are many cases where it has become fairly pointless.
My advice is to do what the rest of us English speakers do: ignore the rules and make it up as you go along. -monkey
No, English grammar has many aids to avoid confusing the reader. Punctuation marks show the rhythm of a sentence - a translation from spoken to written words. But modern thought by the great unwashed writers is "Sod the reader, I know what I mean!" OED have decided a "pot bellied pig" is unlikely to cause the reader to imagine a ceramic object; they most certainly have not ditched the hyphen entirely.