It's stuff like this that makes me not want to work for a startup. These guys had a great business. Everyone loved their product. Even the people who got physically sick from using it still thought it was cool and wanted them to succeed. They had a perfectly viable company that could have been very profitable on its own. But hey who wants all the responsibility and work of having your own profitable company when you can just sell out...
Let's not even get into how unethical it is to use something like KickStarter to get you started and then turn around and sell out for billions a couple years later before you even ship a consumer product.