A "hardware failure in our primary encryption hardware device"? "corrupted encryption keys"? Not exactly reassuring!
Did a hard drive fail? If so, why aren't they using RAID? And if changes automatically cascade to backups, then they're not backups. If changes cascade it's called redundancy.
From the rest of the status update it looks like they're now restoring CC data from an older set of backups. But are they? No way to tell.
It's surprising how many technical terms the status update uses and how little it actually tells about what's going on.
I'm sure that they'll come up with a more complete story of what happened in a couple of days, after they've got everything under control. Given how critical Recurly is to their customers, I think they should worded everything a little more carefully. Explain what happened in normal language. Explain what percentage of accounts is affected. Explain what they're doing now. Explain what measures they're going to put into place to prevent similar things from happening in the future. Emphasize with the customers (who completely depend on Recurly for their business). This shouldn't be rocket science.