I don't think there is anything wrong with raising your prices. The main problem here is how they handled their existing user base. "Grandfathering" is not a short-term, temporary thing, what they're doing is a grace period.

The right way to handle this would be to just let everyone who was on an old plan stay on those plans. Then, instead of a backlash, they'd be getting a sales bump as people who were on the fence signed up before the price change deadline.