yes, shutdown does what telinit 1 should do which is not surprising
since /etc/event.d/tty's list the clause "stop on shutdown".

Problem presists in today's version of upstart (0.2.1.5) too.

Moreover "init 1" does nothing at all, apparently upstart does not know
yet, that init invoked by PID!=1 should behave like telinit.

PS. 
The login prompt in the first second of boot sequence is a dream come true. If 
upstart existed ten years ago the world woud be different today :-)

-- 
getty's ignore runlevels
https://launchpad.net/bugs/58913

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