Well, wowace started as a developer community for addon authors and Ace devs to have a place to discuss the framework. It was forums and an svn repo only (maybe the wiki?). Then they added the files page so that the authors/devs and their alpha/beta testers could have an easier way of downloading the few files on the svn.
Word got out to other authors that the ace forums were a good place to get help with their code, and if they wanted to use the framework, they could put their files on the svn, too. So, more addons were on the files page, and more authors were using the forums. Release versions of the addons were supposed to be pushed to release sites (like here or Curse) - wowace was just a developer location, and what was on the files page were alpha/beta versions of mods.
Then word got out that there were a few really cool addons on that files page for download. Users started using the files page to download mods. When they had problems with them (which they did, because they weren't release versions), they went to the wowace forums to ask for support. The developer forums now had to support mods, too. More people found wowace, more addons were added to the svn, more users came looking for new mods. But it was still fairly well understood that these were alpha/beta quality addons, and the users expected bugs, and they helped beta test, debug, put in new features, etc.
To aid people with beta-testing these *non-release* versions of their addons/libraries, WAU was created to help them update to the latest versions easier. Everything snowballed from there. Suddenly, users were in love with the one-click updater, with absolutely no regard for the quality of addons on the other side or the cost of the bandwidth to funnel their new obsession with updates to them. Users begged authors to put mods on wowace just so that it could be updated at the click of a button, and more authors flocked there because of the *developer* support community and how people could commit to others' projects for bug fixes, translations, etc.
WoWInterface hosted Ace for over two years, with not a single ad on the site. Eventually Kaelten took Ace off WoWInterface's servers. Then WoWAce could no longer survive on the funds it had. Kaelten was forced often to pay bandwidth costs out of his own pocket. When Kaelten asked for donations hardly anyone donated, so he stopped asking. When ads were put in WAU to help fund some users' crack habit of updating, there was a revolt. By that time, Kaelten had taken up a position with Curse, who also helped him out by paying for the cost to keep wowace up and running.
The snowball kept building. As of the close of the wowace svn last week, there were over 1600 addons on the svn. That is not including severely old mods that weren't even shown on the files page/WAU any longer, nor anything in the branches repo which some people downloaded manually with svn clients. The wowace forums had over 10,000 accounts. You don't even want to imagine the monthly costs for providing all of that - especially on patch days. If I remember correctly, wowace topped a *Terabyte* in one day for 2.4. That is 1024GB. To put that in perspective, my photobucket account (hosting my sig below) allows me 25GB in one *month*.
For a long time, it had been noted that change was needed for wowace. I saw it, too. You can go back and search the forums, and you will see threads from a year or two ago with people talking about what was needed to help keep wowace alive. Finally, something happened. Now, wowace will never be in need of funds to keep its doors open. Now, Kaelten can be paid to keep the doors open to the website that he loves. Now, not everyone agrees with the change. But everyone agrees that something had to be done. If you think things were perfect before, then you just had no clue, tbh.
As for getting rid of users from wowace, remember that there are two different levels of users. There are users that understand the notion of alpha/beta versions and what it means to beta test and give feedback. These are called "power users." There are also users that just liked some of the mods that wowace provided them, and they just wanted to download the mod and play the game. These are just regular users. Like my husband and I, I belong to the first group, he to the second. He would much rather be able to have stable releases (which will be pushed to Curse now, from wowace) and have no errors when he logs into the game for a raid. I love trying new things, even if they're broken or only half implemented. I give feedback, bug reports, dig into the code...
In all honesty, that second group of users never belonged on wowace in the first place. It was never ever meant as a release site, and wasn't built that way. WAU made users and authors lazy - authors stopped "releasing" their addons to release sites because it was too easy to just leave it on WAU, and users didn't want to look anywhere else because it was too easy to click one button to update. Now, it's as simple as setting a version in the toc file to a certain format to get a mod pushed from wowace to Curse, so authors can still be lazy. Regular users can make sure they get only release versions of those addons from Curse. Power users can still check out bleeding-edge versions of their favorite mods for testing from the wowace site.
I won't lie to you - I, personally, preferred WAU to the Curse Client, and I prefer wowi to Curse (no, I'm not being biased - I'm smod here *because* I like wowi
). Some authors will pick up and leave wowace so that their mods do not end up on the Curse site. Like I said, not everyone agree with the change that was made. But I hope I have provided insight into why it was done, and how long it had it coming, and why wowace is, and will always be, a developer community.