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While there are a number of third-party Twitter applications that are not directly endorsed by Twitter, I've made it a point to stay away from those sites that require my Twitter password. Case and point is what recently happened with Twply.
The issue on selling is quite obvious. The author had their site on a shared service, which clearly has its limits. This just shows poor execution on the owner as he didn't anticipate the amount of usage that the site was going to receive. The author is a young start-up junkie, that isn't looking to put more money into a project that isn't going to bring him any money, so it is understandable that he sold the site so that someone who has the financial means to do so, can keep Twply up and running.
The only thing the original owner is guilty of is not realizing the key elements to his site are missing (eg: Privacy Policy, Terms of Service, et. al.) which I'm sure will teach him a lesson in the future when he decides to release another application.
I see no harm in his application, given that the idea was clever, just poorly executed. God forbid that it wasn't a perfect launch. But hey, you obviously can't please everyone. It's obvious that people are going to be so quick to pollute the waves with false accusations that have no legitimate proof of their claims. Sure you have the fact it was a new startup and sold immediately, but there was evidence as to WHY it was sold immediately.
If you can't support it to keep it running 24/7, then you do what it takes to allow it to survive, and if that's selling it, then hey, that's what you have to do.
Given Twitter's huge popularity and open API, pretty much any service offering Twitter interoperability or bridging the gap of a feature set not offered by Twitter themselves will spark initial buzz, so that's something a start-up attaching the Twitter name to themselves has to know. It's common sense.
You can't please everyone -- particularly when you sell their e-mail addresses to the highest bidder no less than a day after launching your service. More than just selling the addresses, the Twply brand (if there is one) is now tainted because of the sale. If anything, this should build the case for similar services in the future to be more transparent and scalable. Cloud computing services are affordable, and even for a new service that was probably Dugg, Slashdotted and BoingBoinged all in the same day, that should be expected. I'd be shocked if they released it and didn't expect a huge user base.
Personally, I think selling the addresses made it spam. The team could have just closed the site down with a reason saying way, at least offering more of a transparent effort as to what was going on that to go silent then sell it off while explicitly stating and showing the number of acquired e-mail addresses. That's what crossed the line.