Quite frankly, it depends on who you ask. Some argue that the British were deliberately being vague, but McMahon wasn't in on it. Some argue they went back on their word. Some argue that it was never promised.

Here's a few examples:

From Righteous Victims by Benny Morris:

During the second half of 1915, British Middle East hands were gradually converted to the idea of an Arab revolt. But initially, the high commissioner in Egypt, Sir Henry McMahon, vacillated as to the price. He could not reject Hussein's far-reaching territorial claims, lest he torpedo the prospective revolt. On the other hand, he could not accept them: Britain's own growing territorial interests were at stake, as well as French claims on Syria-Lebanon and other areas. On October 24, 1915, having consulted with London, McMahon took the bull by the horns and replied: "The districts of Mersin and Alexandretta, and portions of Syria lying to the West of the districts or vilayets of Damascus, Horns, Hama and Aleppo, cannot be said to be purely Arab, and must on that account be excepted from the proposed delimitation." McMahon added that the Arabs must recognize "Great Britain's established position and interests" in the vilayets of Baghdad and of Basra, and a "special [British] administrative arrangement" would have to be established there. Britain was saying that the Syrian coast, including Lebanon, was to be excluded from the Arab area and kept for French or Franco-British dominion. So too was Iraq. Present-day Syria and Jordan, on the other hand, which constituted the Ottoman vilayet of Syria, were to be included, along with the Arabian Peninsula, in the "independent" Arab area.

There remained Palestine, which had nowhere been explicitly mentioned--as, indeed, India Office official Arthur Hirtzel pointed out: "Jerusalem ranks third among the Moslem holy places, and the Arabs will lay great stress on it. But are we going to hand our own holy places to them without conditions?" For decades thereafter the protagonists were to argue about what McMahon had really meant. The British, including McMahon, and the Zionists maintained that he had implicitly included Palestine in the areas "west" of Damascus excluded from prospective Arab rule, though a minority among British officials (Dr. Arnold Toynbee of the Foreign Office Political Intelligence Department for one) held that McMahon had in fact earmarked Palestine as part of the Arab state. The Arabs argued that, as Palestine was not to the west but to the southwest of Damascus, and as it had not been explicitly excluded, it was to be part of the Arab state. On balance it appears that they were right. McMahon had specifically set aside for "non-Arab" rule Lebanon and the northwestern Syrian coastal regions. Motivated by concern for French sensibilities, he had omitted explicit reference to Palestine, and nowhere in his letters had he concerned himself with Zionism or Jewish claims. But he may well have misunderstood the Foreign Office's brief, for London by this time was clearly seeking to exclude Palestine from the independent Arab sphere.

Pg. 69-70.

From Palestine and the Arab-Israeli Conflict by Charles D. Smith:

McMahon stated that in the areas "where Great Britain is free to act without detriment to the interests of her ally France;' it pledged "to recognize and uphold the independence of the Arabs in all the regions lying within the frontiers proposed by the Sharif of Mecca" and to protect the holy places against external aggression. These areas appeared to include, at the least, central Syria, including Damascus, Horns, Hama, and Aleppo, northern Iraq, and Arabia.

This declaration, although apparently specific in certain instances, was intended to promise more than it would fulfill. A bone of scholarly contention has been the use of the word district to refer to Damascus, Horns, Hama, and Aleppo. The Arabic word used was wilaya (in Turkish vilayet), which usually meant "province" and was employed in that sense with respect to Basra and Baghdad in the same letter. But when referring to the four Syrian cities, it signified to McMahon "cities and adjacent environs," a meaning clear in McMahon's own references to the term and the areas involved." The importance of this distinction rests in what was intended to lie west of these "districts": If "districts" meant cities, as McMahon felt at the time, then the areas west of them would incorporate an area from Lebanon, including Beirut, in the south extending north beyond Alexandretta, already omitted from the region that Husayn had demanded. In this interpretation, Palestine, unmentioned in the letter, was not specifically excluded from the Arab territory to be independent after the war. The British later claimed, however, that the term "wilaya" signified an administrative district when applied to Damascus. According to this interpretation, the wilaya of Damascus included eastern Palestine, the land across the Jordan River, and omitted western Palestine, which by this time had been promised to the Zionists by the Balfour Declaration. As subsequent developments demonstrate, the British never intended to cede Palestine to the Arabs, even though some officials acknowledged privately that McMahon's letter seemed to include it.

Pgs. 61-62.

Then there's what you read. If you look at this:

The McMahon-Hussein Correspondence: Comments and a Reply Arnold Toynbee and Isaiah Friedman Journal of Contemporary History Vol. 5, No. 4 (1970), pp. 185-201

The journal there is linked to JSTOR right here.

As you can see, the support for Friedman's view continues. But wait! Charles D. Smith wrote an article:

The Invention of a Tradition: The Question of Arab Acceptance of the Zionist Right to Palestine during World War I Charles D. Smith Journal of Palestine Studies Vol. 22, No. 2 (Winter, 1993), pp. 48-61

Linked here, trying to rebut Friedman!

Then you've got Elie Kedouri, in In the Anglo-Arab Labyrinth: The McMahon-Husayn Correspondence and its Interpretations 1914-1939, who disagrees with Smith and agrees that Palestine was not promised.

Who do you believe? It's impossible to really say: We can't go back in time and ask McMahon what he meant, and what Husayn believed, and if there was intent to deceive, etc.. There is only, as far as I've seen, a lack of clarity via different interpretations of the same material, as with so much else. That's about all you can really do, is try to look at them and compare (unless you read some of them and make up your own interpretation)!