It became popular because it was open source and the community built the brand recognition. Now he went and took the brand recognition to do something that the community didn't expect and doesn't approve of.
EDIT: It seems after further research the license that was being used prohibits the name "Growl" being used to promote any derivative works of the same name without explicit permission from the original owners. [1] - http://growl.info/documentation/developer/bsd-license.txt
No, I doubt the naming falls under source release. See Firefox.
Just about every open source licence, include the BSD released code, explictly gives you the permission to sell the software. If the original author released Growl 10 years under an open source licence then they gave you the permission to sell it commerically then.
The name is complicated and usually falls under trademark law, and hence you probably could be sued for claiming that your fork is "Growl" when the average person thinks that only $ORIGINAL_AUTHOR can release "Growl".
Note that the copyright on the code and the trademark on "Growl" are separate issues.