This is not blackmail. Blackmail is when the villain demands money to refrain from releasing injurious or compromising injurious information.
This is better described as stealing and ransoming the domain name. If it becomes popular, then perhaps we can coin the term "namenapping".
But it isn't blackmail. (Well… arguably the revelation that they use GoDaddy as their registrar is pretty embarassing, but that was public information already.)
I think I would pay the $2000. With hundreds of thousands of dollars of revenue on the line, it seems like a good investment. Plus, once the hacker cashes the check, he is that much easier to trace.
The idea is to make it easy for this guy to be arrested, not to make a habit of sending random people money.
I don't buy things advertised in spam, but I keep getting it anyway.
This sort of scam is like spam. It is easy to perpetrate the scam and hard to be penalized for it, so it isn't going to go away. Send a few emails and you have a chance of someone mailing you $2000 and probably not getting caught. Not a bad deal for the criminal.
