I hate to be judgmental. We are humans, we all make mistakes. But it's my understanding that they were operating for several years and hosting the data for many people. Carrying on without a backup plan and hoping for the best was very irresponsible and I agree with you that they, sadly, deserved to go out of business.
The only good thing to come out of this is that everyone involved (sysadmins and management) now is (or should be) a devout believer in making routine backups. It's a hard way to learn a lesson, but they're not the first nor will they be the last to learn the hard way.
