Wow. I've never knew — but judging from a few emails I've got — I had some users of SimplyTweet from HN. It's sad, but it was fun while it lasted.
I remember when I was on honeymoon and my web host fired me an email about blocking internet access because I was overloading their DNS server. I explained my situation (hey it's a production site and I'm away on vacation) and requested for them to keep me up for 4 more days when I'll be back home. They refused and I had to worked on it at the hotel, while my newly-wedded wife waited. I remember when I woke up in the night 2-5am, doing support, replying to users. I was fanatic about supporting users well.
I loved what I did. But that love has waned. Why stay when you aren't welcome?
I'm not saying I agree with this policy (I absolutely don't!).
WHy don't they "just" serve ads using the API as well? And ad a line in the EULA saying something like: "Not showing these ads will mean termination of your Developer Account" or something like that
Serving ads through the API alone also limits ads delivery. For eg., they might want to display full screen video ads like how iAds does it. Or they even want to do something even more fancy (remember the dick bar? Imagine if there was no third party Twitter apps when they launched it). Without complete control, it's hard.
In a way, they are at stage 2 of their evolution, stage 1 was iterating on their core product, now they need to iterate on their business model.
PS: I'm the developer for SimplyTweet. I'm biased, but I can imagine where they might be coming from, even though I'm not happy about it.