I guess the team turned it down in the hopes Path will be many times the offer. I just don't see how an iPhone app can worth more than $120 million. I think the most successful app would be angry birds, but i doubt even the most optimistic valuation would put them over one billion.
You don't see plushies and fan art for the other games - and you shouldn't ignore all the ways the creators profit from the franchise. They also make a bunch of themed releases like Halloween. They may also have hit a tweenage demographic susceptible to crap like Silly Bandz, Bratz, and other inane ztuff.
They even have an ad ready for Superbowl(!).
All on the back of one simple little app that looks and feels like a flash game. (i love it, don't get me wrong, but it is not anything special)
Did Harbor Master or Flight Control do this? No.
It takes a lot to think big and that's where the big players are-- and worth a good chunk of money too.
I'm definitely less appreciative of them than many, but they've obviously capitalized on their success - opportunity didn't just drop into their laps.