There's a follow-up to the URGENT UPDATE on SO: http://meta.stackoverflow.com/questions/111279/remove-nofoll...

So it appears that they do remove rel=nofollow from reputable links, although their threshold for reputable appears to be very high.

How is that not the expected result?

When the sites that informed various well regarded answers on the sites get their due, their search engine rank rises. With such a well ranked site now pointing towards them, they rise in the results, often higher than the SO answer referencing it.

As a secondary issue, there's a relatively common black-hat-seo practice of buying a well regarded domain, and soaking that links for all they're worth to promote something. Their switch-flipping may have run afoul of systems designed to mitigate that.

The author posted the original article on 17th Dec 2010 and an update on 11th Dec 2011.

So not sure how this made it to the front page of HN. Not surprised the author doesn't address the response.