If you take them at face value that's the reason, personally they've lost nearly all my trust so I'm wary of accepting that as the reason. Also fraud and abuse are not unique to Heroku, every hosting provider with a free tier has to worry about that. This is a case of throwing the baby out with the bathwater as well as showing they don't really care about new developers coming to their platform.
In this thread and the other on the frontpage currently there are many people who started using Heroku on the free tier and now run or work at companies that spend thousands or tens of thousands a month on Heroku. This change is causing at least some of them to start looking around or even say for sure they plan on moving off of Heroku. This will effect Heroku today (people leaving) as well in the future (people never coming in the first place). To me that's a sign of them giving up (if it wasn't already clear by their actions over the last years).
