As an API, it was rather unknown. Guess what really ticked people off was the redistribution of the complete data. There are several custom private APIs that scrape HN already (see backtype for instance http://www.backtype.com/page/paulgraham.com%2Ffounders.html and http://www.backtype.com/url/news.ycombinator.com%252fuser%3F... and http://scraperwiki.com/scrapers/y-combinator-scraper/), and people don't seem to care the slightest.

Not to mention there are open source tools to scrape HN by yourself: https://github.com/JackDanger/hacker_news