I wonder how much of the incident and poor handling of the response is due to losing their particularly good CTO (Marco) a few months ago. I would be a bit concerned if I were a tumblr user or investor.

Experience with LiveJournal, Friendster, Twitter, etc. has been that problems don't just magically fix themselves; absent someone with enough vision to figure out potential problems and actually solve them in technology and business process, you're kind of fucked. In the case of Twitter, they had enough money to buy some excellent talent. In the case of LJ, Brad stepped up as an amazing hacker (with limited financial resources, and really one of the first to solve the problem). In the case of Friendster, bad executive leadership (CEO/board being ineffectual, VP Eng being a tool) killed them.