I guess they shouldn't have fired the CEO who built the company and replaced her with a suit from a company that's widely acknowledged to have screwed the pooch on virtualization.
License servers suck. Most of VMware's customers are banks, telcos, and other large firms running ESX farms. They have the money to pay, and they will. Don't fuck them up by breaking their VMs for licensing screwups.
If they wanted a better, but still harsh, solution, print a large alert saying the server is reverting to trial mode and will expire in 30 days time.