Either way he's definitely ended his entrepreneurial career. Nobody is going to put a dime into a guy who does that - the risk that he'd do something much grander when the stakes are much higher is obviously there.
He should have sold the company, honoured the terms of his agreement.
People are downvoting you, mostly because you are making a big deal out of a very simple situation. As one commenter said above, they would either get nothing, or nothing, and the VC firm, through the publicity they are getting now, will very likely profit from this sign of good will.
So their choice was between nothing today or nothing later.
Tax-wise it was probably better to write it off now than carry a zombie investment into the future.
Like you said: their investment was a transaction and they made rational choice.
It's the emotional "we can't loose money" or "how dare the founder sell without us getting a cut" that would be a worse choice.