While Matt is perfectly correct that when you pay for an app, you get the app you paid for. But there's a very well known unwritten suggestion that you'll get updates for 1-2 years. At which point probably they'll release a new version, and you'll pay the upgrade fee. It's how most software seems to work. So, people technically don't have the right to complain - there is a lot of sense in why people are upset. And there's no real explanation from the developers that buying their software wasn't going to lead down that route.
I think the biggest issue about the acquisition for me is the fact Sparrow bled the product dry a week ago by having a sale and then doing this. It seems underhanded.
And for the record, I also find it a shame that they've been acquired. I'm happy for them to be given big wads of cash, but in a selfish way I would have wished to seen them tackle more problems in their way - producing quality results. I have a bad feeling as we've seen again and again, we won't be seeing anything from Google with the calibre that they did with Sparrow.