A) They were overpriced to begin with.
B) Tom moved his MMQ business and started "developing" ASICs, and was selling a 72GH/s bASIC. The project flopped, Tom went off the deep end, and all of his customers basically got screwed.
C) ASICs from ASICMiner, Avalon, and even BFL are starting to pour in, making this useless.
What exactly happened? How'd he screw everyone over? Just curious
I don't think everyone was equally screwed over though. Most of the people who paid with credit cards were quickly refunded. I had several CC orders and every penny of every one of them was refunded. For those people who paid in BTC it was a different story. The refunds were a lot slower, and to make things worse because the USD value of BTC had gone up they got a lot less BTC back. It is also not clear to me whether everyone got paid back fully.