This is all Verizon, not Microsoft.
Microsoft made a mistake of porting the danger code to winCE. This added 18 months dev time. Verizon at the time was getting killed by the iPhone and wanted such a social device.
The Kin is still ahead of it's time in many of the features it has. If it had been released 18 months earlier and with a reasonable (say $10-15) data plan it would have sold like hotcakes. Verizon got all pissy and decided to milk as much money from the Kin as they could so they bundled it with a $30 data plan that killed it.
That's why Verizon wasn't a priority when it came time for WP7 and they are pissed about that too.
This decision is 100% verizon. They are dicking the customers here, not Microsoft. Heck just selling the Kin with everything that makes it stripped out is a slap to the face of upcoming customers. They'll get a gutted feature phone plus a (reduced price mind you) data plan for a device that no longer does data...
Streaming Zunepass over wifi only and not 3G? Yeah...that's Verizon being a dick, not Microsoft.