Any early-adopter of a start-up product accepts the risk that the company behind the product might be unsuccessful. Customers like that bet, in part, on the notion that despite the statistically long odds, the company is making every conceivable effort to stay alive and succeed.
The 'buyout-and-the-product-dies'-type exit introduces a sort of divided loyalty and misalignment between the goals of the founders and the goals of their customers - if you're unsuccessful you might fail and we might suffer an abrupt service termination but at the same time, if you're quite successful, we might also suffer an abrupt service termination.
These transactions trade on the goodwill of early adopters. And they make it harder for other startups as potential early adopters start to assume that it's better to wait for what Google releases instead of investing time in a product that will be scrapped either if the company fails or is successful and acquired.
I do not begrudge them making money at all. But one reason that they have "millions of dollars worth of Google stock" is because they offered a service that people adopted and paid for. I think they have more of an obligation to customers and users than the initial announcement indicated and I worry that not taking better care of customers in the transition makes it hard for other startups.
It now looks like Google has reconsidered the shutdown and EtherPad will be on-line until open sourced. http://etherpad.com/ep/blog/posts/etherpad-back-online-until...