I'll give you my take in case you haven't read it elsewhere:
1. If you'll look at the fine print of almost every single major frequent flyer programs you'll see this "... subject to change without notice." If you think that this is the first time that any program has ever changed it's rules without notice.... then you have not been active in enough programs. Now, you might have considered this a tough question and wonder why we didn't ask them. It's simple, we read it in their rules, we understood their rules and they did nothing wrong outside their rules. While it may not be like you and I would do it, it certainly was using the very same procedure that many other programs have used.
2. See above. I've seen others give no notice, just a few days notice, etc. Again, their rules do say they have the right to change the program without notice and others have done it in the past as well–American, United, etc.
3. I can't answer that one.
4. I can only guess on this one. They had X number of ticket stock for some time and might have figured that based on past redemption patterns they had enough. Because of FT, the heightened awareness of these changes made for a larger demand on redemption and thus they ran out.