I've never used Cash and Points in the past because I usually have plenty of points to just book entirely on points (and although the value may not be as good does not incur any out of pocket cost). However, I do see this as a devaluation of the program and the verbiage on availability is quite vague.
One needs to check on value for C&P as well as on Free night awards based on the room rates available for the dates desired. Both can be good and bad values. I just checked the hotels in Munich for the end of this month and only 1/7 is showing C&P available - Cat 3 for 2800 pts + $45 USD; standard rate 116 EURO + tax, so in this case C&P would be a pretty good value. I also see that a Cat 4 Four Points has free nights available for 10k points per night while the standard rate is 101 Euro - that to me is not a good value at all. Contrast this with with 12k points needed at the Cat 5 Le Meridien where rates are minimum 231 Euro per night and I see that as a great value (more than 2.5 cents per point which to me is really good although I know you can get better).
I don't think everyone here will just leave the chain, it's just going to be more difficult to get a good value out of your points.