"We have been advised that law enforcement officials are aware of the intrusion into this customer’s systems." sounds like a customer was hacked, not Linode.
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...