So, yeah, I can see how Flattr, a service that revolves completely around a community of people who actually appreciate others for their work, is upset at the company whose notion of "thanks" is a Cease and Desist.
As developers, we should be alarmed - we shouldn't be blaming people for 'not reading the terms of service' or saying that 'Twitter has the right to do what it wants'. These answers might be technically right, but they don't capture the true feeling of what is right, which is that developers should build apps that enhance Twitter's ecosystem.
So, that's it for Twitter for me. I only expect Twitter to get worse about their developer policies in the future, and I don't want to be a part of a community that treats developers poorly.