This may be an unpopular post, but I support SE in their attempt to reduce piracy. Yes, it was using a blunt object to try to accomplish a very specific objective. But I have to sympathize with companies who put time, money and effort into a product just to see huge numbers of people steal it.
Here are my thoughts as to why they weren't totally wrong:
1. We don't know the number of people who have pirated SE games, but SE may be able to see how many activations, or server pings or whatever. There are precedents where developers sold a small number of copies and yet had thousands of users attaching to their servers to play. So, it's not improbable that this is a serious problem for a high profile game.
2. They really said that the reason that they are reversing is that they didn't do a good job of explaining that this would happen BEFORE purchasing. If there is plenty of warning given to customers, then only jailbreakers that were also stupid would be hurt. Yes, they might lose some (again difficult to quantify) customers, but it would be because those customers valued what they get from jailbreaking more than they wanted to play the game. Much less of a backlash than you would get if someone paid money and then couldn't play the game.
3. I am aware that many jailbreakers have no intention of stealing software and that if very clever you can steal on non-jailbroken devices, but the anecdotal evidence says that there are substantial numbers of jailbreakers who are also pirating apps. It's like the porpoises and the tuna. It's really sad that some porpoises get caught in tuna nets, but let's be honest, the ratio of tuna to porpoises is pretty large.
Anyway, I feel bad that in order to not alienate some customers, a company has to allow its product to be stolen by many others. Hopefully, they can find a more elegant way to only block those who don't have a legitimate right to play.