I believe that threatening with legal action was the secondary choice for Twitter.
The first choice would have been simply blackholing the IP address of Dean's application. However, that's impossible because it's a .Net app that makes calls from each user's IP address, much like Tweetie and TweetDeck. Was it a good move? I don't know. Now they have created yet another round of potentially bad publicity for Twitter, and they have put fear and uncertainty in the minds of all application developers who have a domain name with "twitter" in it. Dewald
