Yeah, the idea is sound (assuming it was properly marketed), but simply shutting everything down because of an issue like that does sound excessive. At the very minimum, they should have a basic backup that is enough to get the servers running again even if the customers' data got wiped.
It sounds like they were just waiting for a reason to get out of the business. Sometimes you just keep something running because it handles itself, but isn't really bringing in any considerable amount of money. But once you hit a hiccup like this, it's not worth the time to fix it, because it wasn't really a revenue stream in the first place.
70k is a lot for a person, but not really a lot for a company. Someone mentioned they were one or two people, so that's not too bad, but if you get much beyond that, cutting that 70k may make it more trouble than it's worth.
I noted that too and it's really weird. So, they do no have backup of their part of the data (or they don't want/are not able to restore it) but they still have the customers data?
Perhaps things were running in maintenance mode already, and there is no longer the desire to run this part of the business, so they took this unfortunate opportunity to wind things down.
Maybe they’re compromised but data seems intact, as in it’ll be irresponsible to keep serving on the Internet but most of it are probably not maliciously altered?
Yeah, it's pretty common for hackers to upload backdoors to random web sites when they can and exploit them at a later date. If we're talking about a full server compromise then I wouldn't use those downloaded data for anything except for analysis/archival purposes, unless it's been thoroughly cleaned first.
Really, not everything on the web needs to be mission-critical.