It's a bit of a train wreck. They're snatching defeat from the jaws of victory.

I don't know about anybody else, but I hadn't ever heard of plurk before this. They could have leveraged this for some great PR ("come see the site that is so awesome that even Microsoft wants to rip it off"), instead they throw a fit and destroy any PR and goodwill options they might have had.

Odd to see Microsoft's PR guys get it (quick, sincere apology minus any defensive legalese), while the injured party, a startup, doesn't.