Awesome decision. It's easy to say it was the right call from the sidelines but it's also easy to underestimate the personal cost that must have been involved with walking away from his company, especially with the gag orders making it impossible to discuss his reasons.
There was more than a personal cost. The staff of Lavabit had no idea what was happening as the servers were being shut-down, until they were told to go home.
I apologize; it was not my intent to mislead (though it appears that I did so inadvertently). I was told that the outage was related to maintenance regarding the storage system