Developers drove revenue for Microsoft (software licenses). For Twitter, developers prevented monetization.
Except that they didn't. There wasn't even any discussion, it was just "We're capping OAuth tokens.". Developers offered to pay for access, users offered to pay for the ability to use 3rd party apps.
If they didn't want to go down that path then Twitter could've easily required developers to show monetised tweets/ads.
They killed a community due to arrogance. And it backfired big.
The problem with Twitter was more serious: they never gave a concise and frictionless way to pay for the API. For example, Google innovation with AdWords was providing a self and quick service to put ads while other providers like Yahoo required a process with a lot of friction. Twitter logic was prehistoric.