When I was in HK in May, my mother had urged me to get my Octopus card replaced. Since I didn't experience any trouble with mine, along with the fact that I was only home for thirty hours, I passed on doing so. I think someone on the ground in Hong Kong would have more information but I think this is all related to an actual program to get users to update their Octopus cards.
You mention that one of your party hadn't used their card in at least a decade, which would lead me to believe that his/her card is considered an on-loan/anonymous card (I have one too, FWIW), which would qualify for a replacement.
http://www.octopus.com.hk/cardreplacement/en/index.html
http://www.octopus.com.hk/cardreplac.../en/index.html