The API's the thing that makes Twitter tolerably-usable to heavy users—the ones who draw eyeballs to the site so the ads are worth more than $0.00—right?
If so, not wanting to maintain it would probably count as incompetent, yes.
I'm not familiar with Twitter or its API, but are ads also returned via the API?
If not, then it would be more profitable for them to heavily restrict API access, and kill off 3rd party clients, so that more people would use the official clients where ads are actually shown.
I.e. they don't care about heavy users if they can't make a profit from them.
Heavy users are the ones who generate the content that gives the site value in the first place, though. Advertisers aren't there to sell products to the 1% of users who make most of the posts, they're there to sell to the 99% reading those posts. Making posting on twitter a bigger pain for the people who do most of the posting—and especially for celebrity and brand accounts that get tons of "engagement" they want/need to keep track of—is probably not a great move.
