Mathew Ingram ponders the demise of Scrabulous:

But lots of people responded that this would effectively reward the Agarwalla brothers for what amounts to copyright infringement, since the game on Facebook looks (or looked) virtually identical to Scrabble. Obviously that’s wrong. Right? I’ve been going back and forth on that question for some time now, and still haven’t decided. On the one hand, copyright should allow Hasbro to control where the game appears -- but at the same time, Scrabulous wasn’t charging people to play, and it helped promote the actual game. Why not give the Agarwallas something to compensate them for their ingenuity?

There's a simpler way to look at that. What harm was Scrabulous doing to Hasbro? It was a free ad for the game, and - by all accounts - was raising interest and awareness of it. Doing a deal with the authors would have been good business and pragmatic.