From the non-delivery of the "forgotten password" emails, I assume that you weren't checking the email you registered with any more (maybe it was an old one you no longer used)? However, I don't see this as Mozy's fault. They provide you with online backup for free and all they ask is that you regularly check in to show that you're still using the service.

Providing services costs money, and it's entirely acceptable for the provider to terminate non-paying users' services at any time. Of course, it's much better if they do it after a while and with a warning (which Mozy apparently did do), but it's unfortunate that the email was lost.

In summary, I don't think people have much right to complain that the service they were getting for free wasn't provided in perpetuity as well. If you wanted reliable service, I think the 5 GBP/mo isn't too much to pay to ensure that your files are safe.