Sounds to me like Movable (and TypePad) made one lethal mistake in the business world: being romantic about the market. Thinking about “should be cave in to Google?” was the wrong question. The right question would have been “what does the market want?”.
Maybe Google would have given those CMS “competitors” more traffic if they would have optimized for its algorithm, just like all the other competitors Google still sends traffic. Yes, Google started to serve some verticals itself (travel, finance, weather, etc.) but that started only recently. Most companies would have had enough time to get (free) organic traffic from Google to build out enough brand equity and other channels. That’s one of the reasons why Amazon is one of the few companies Google is afraid of.
Overall, I think blaming people for maxing out a system is morally ambiguous because it’s in human nature.