Basically what I heard is that in order to prevent a full Cease and Desist order they negotiated a "gentleman's agreement" where MWLL would be given 1 year to complete what it can and after that point no new features could be released. The agreement also said that MWLL mustn't copy any features from MW:O except the ones MW:O copied form them (here lies a partial reason to commando death and why MW:LL will never have an official mechlab).
It was then the decision of Wandering Samurai Studio owners and the dev team, to discontinue working on the mod, that could have no new fetures (just bug fixes and rebalances).
1. No official CnD
2. To prevent it a "no new features or copying" order was given with 1 year to comply
3. Development of MW:LL was stopped because of 2.
Bottom line: MW:O and Piranha are still to blame, DO NOT POST RANT TOPICS AND HATE MAILS. You will only get Kamikaze, Criminal and the rest of the dev team into trouble. Protest silently (yes you can, join me).
There really is no one to "blame" though in a "THEY DID THIS, THEY PULLED THE PLUG" kind of way
We made a mod on a pre-existing IP that at the time wasn't being used, and we did it through legal channels.
Fast forward to the current day, and the IP is now being used. Not only that, but the users of the IP are using the engine/technology that the founders of this project (Kami+Crim) now work for. Seeing as both of the mod founders work for Crytek on Cryengine 3, and PGI (who's using the IP in a higher up position) is using Cryengine 3, this creates an awkward situation where they basically had a mod project that competing with a commercial project using the same engine, and you work at the company that is letting this happen.
You could say PGI is to blame, but it's more or less the fact that the IP itself is now being used for commercial purposes in general. It doesn't really matter who would have taken the IP - Crytek, PGI, Smith+Tinker, Epic Games, whatever - the existence of someone doing a commercial project with the very same IP that you founded a mod on creates an awkward situation, especially if there is any concern shown about that fact either by the users of the IP, you as a founder, or the company you work for.