[dmbaggett]

Now they are doomed to work to the end of their lives for big corporation. No one will give them a dime if they ever want to work independently again.

In my experience, ($700M sale to Google in particular) that's just not true. It's quite typical for acquisitions to include either earn-out provisions (you must work for the acquirer for N years or you forfeit some of the purchase price) or retention bonuses (work for N years to earn an additional $X million).

Every investor expects these outcomes; nobody would be surprised or put off to hear that the Sparrow guys are locked up for N years, and nobody I know who invests would view them as damaged goods as a result.

As for Sparrow users being the losers; there are lots of fish (future email clients) in the sea. The popularity of Sparrow is evidence of a market need. Whether any email client author can make real money meeting that need is another question.