But here, it's not a customer that was hacked. It was linode that was hacked, and used to access a specific customer's data.
In other words, better safe than sorry.
If the compromise was due to a flaw in Linode's system (potentially exposing other accounts) then a global password reset makes sense.
Can you imagine if every service you used reset everyones passwords every time one of their users got brute forced? You'd do nothing but reset your passwords all day...