If I'm reading this right: I think building an external service in a personal capacity on top of an internal company API/data that you only have access to because you're an employee, it was always living on borrowed time. Frankly I'm surprised it lived long enough to build a following.
He built the site at a company that was acquired by Spotify, and which became their modern recommendation system. There must have been some sort of agreement to keep it going, IMO the real story is about the people that made what makes Spotify good being laid off.
Companies building a gajillion different niche app/features may have just been a side effect of low interest rates and venture capital money flowing like crazy. In practice a profitable, stable businesses does not have to the capacity to both build and maintain software outside of its core competencies.
Part of the reason headcounts exploded is due to companies building more functionality in-house. Features, even after they’re built, aren’t free. It’s not just infrastructure costs it’s mostly labor costs to maintain all that functionality even if it’s to just “keep the lights on”