I have a real problem with them blaming piracy for this, when there are many things they could have done to address the issue, as you mentioned.
But, there seems like there's more to this story. I haven't played the game... but having a popular free-to-download game and making money on consumables is the new App Store model.
So seems if it was a very popular pirated game, they could easily make money promoting it to the broad free-to-download audience and make money on in app purchases. I'm guessing the game will come back retuned as a free-to-play game. (looks like it already had IAP, not sure how effective it was).