Some of the technical staff may have agreed. Mostly though, defense contractors don't end up hiring the kind of people who hate defense contracting.
Prior to the buy-out, if you wanted to make cute little household robots, would you have applied for a job at Boston Dynamics? (FYI, NO!!!)
If BD has any kind of intention of selling to anyone other than the military or researchers like themselves, they'll need a brand, manufacturing and distribution. Might as well bootstrap that now with some less ground breaking tech.
I'm not particularly horrified by military robots, but I suspect they'd have to deal with complications and subtleties in the environment even more effectively than domestic robots in order to be remotely usable.
I think that's the point. Rather than building a kick ass military bot, they'd be building a lame domestic servant. People who thought they'd be doing the former may not find satisfaction in the latter.
I don't think an American company being the first to enter or rather create a whole new market is less of a win than being the first to get some cool new weapon. Wars are won with money remember.
(And that's without even talking about the tactical benefits of having a whole army of spies in the homes of elites all around the globe)
I know this may be horrifying to some, but there are those of us who would rather make a killing machine. We'll settle for a robot that carries supplies for soldiers or watches the enemy.
Defense contractor employees are typically patriotic in a way that would be really alien to the normal tech crowd. Part of the motivation is to do something for the USA. Having Boston Dynamics get diverted to cutesy home stuff is a decades-long setback for the nation.
There is also the matter of legs. Legs are cool.
Household robots are fiddly. They have to deal with a complicated environment. They can't just look at a toddler obstructing the path and go "Fuck it, I'm blowing that away, EAT FLAMING DEATH!!!".
Household robots are cheap plastic, with the shapes and colors totally determined by marketing.
When you buy a company that pretty much makes weapons, what kind of employees do you think you will get? Do you really expect that they will be happy that you have "rescued" them from being forced to make killing machines? Ha, ha, ha.... NO. You took away the coolness. You took away the awesomeness.