This makes it hard to build your own analytics service. The XMPP "firehose" would help, but it is only available to specific partners, as well. While part of this is for scalability and performance, it offers Twitter a way to screen what sort of services people build on top of the data stream. So if they didn't like an analytics service as a competitor, they could just turn them off.
There's integration with gnip as well, but I don't know what the exact features or limitations it has. Again, though, that feed is controlled by Twitter, so they could perhaps direct gnip to cut off a service they don't like.
If you're curious, there are periodic discussions at the Twitter development google group on the effect of API limits. Sometimes these include ideas for reducing the number of API calls required to do something: http://groups.google.com/group/twitter-development-talk
That being said, Twitter has enough capital to acquire companies. Summize is now search.twitter.com, for example. Would not be surprised if some of that most recent $35MM is earmarked for buying companies that provide the next "big" twitter-driven service, whether that's analytics or something else. I'd guess they would try to go that route first, rather than take the bad PR from terminating a competitor.
That being said, Twitter had an opportunity to buy Twitturly recently -- the author was trying to sell the site. As I understand it none of the offers met his reserve price. So does that mean Twitter wasn't interested (or wasn't aware), that they are interested but are waiting to see if it takes off, or that the didn't have the cash at the time?
The downside about Twitturly is that nearly every tweet is the same: the title of the URL. There's less and less relevant information about URLs each time to I check it.
It's a neat idea, but I don't think people are too hot for social media stuff anymore, in terms of acquiring. There are hundreds of ways to get quality URLs, and as far as I know, nobody has really proven it's profitable to provide those URLs. Albeit, sites have been acquired (Reddit, Delicious) around the principle, but I think those days are gone.
I would love to be corrected though...
Where did you hear about the author putting it up for sale?
For how I heard about putting it up for sale, I follow the author's twitter stream, @jstrellner. He announced that Twitturly was for sale on 17 September 2008: http://twitter.com/jstrellner/status/925586511
Later he states that the offers didn't make the reserve price and he isn't selling: http://twitter.com/jstrellner/status/933884602 http://twitter.com/jstrellner/status/934021436
I like Twitturly for two reasons: the aggregation of tweets, and what the tweets themselves say. Reason #2 is getting less and less exciting, because more and more people are using automated means to tweet URLs, which results in the "junk tweet" as described above.
Thanks for digging up that stuff :)
Edit: On the front page, they do a good job of pruning out the junk tweets. But clicking on a URL and viewing the full tweet history shows mostly junk tweets. I'd very much like an option to hide that.