Yeah, if it were my product I would have refunded everybody's money and immediately launched another campaign for the all-USB version of the product.

Announce the new campaign in the same email that was announcing the refund; if people were still interested they could fund the new campaign.

Maybe they do plan on re-launching eventually, or maybe they just don't think there is demand for the compromised product. Or maybe they ran into other issues and are using this as a graceful out. Who knows.