As someone involved in bug bounties, this was completely different from a traditional bug bounty reward. Uber disguised this payment as a "bug bounty" to hide what it actually was -- a ransom payment to get the hacker to destroy the data. If this were truly under the realm of bug bounties, the hacker would have violated Uber's policies for exploiting the flaw and extracting information (the reward also exceeded Uber's top payout tenfold).

In short, the issue people are taking with Uber is that they tried to pass off a security breach as having taken proactive measures, while this was a case of ransom.