There are alternate decompilers/disassemblers out there, but Reflector commanded the most usage because it was free and very effective. Without the free part, and I don't care if it's $3.50 or $350, its allure considerably drops. In fact, its allure dropped when it went to Red-Gate and each download required an email address submission rather than just downloading the damn tool! (which I am sure they used to calculate number of unique user downloads, i.e., sales).
However, what you'll see are alternative decompilers springing up, some yet-to-be-born, some already in existence but improving, and all perhaps even garnering inspiration from decompiling Reflector itself (in fact, Reflector was originally based on an MSFT .NET SDK sample project of the same name).
So, short term it's a setback for the community; longer term though the developer community will have responded with a better and free workaround. Short and long term it will simply be a boneheaded move for Red-Gate whose execs probably watched a PowerPoint Marketing Guy put together showing how number of downloads/month * $35 USD = mad revenue, and like in way too many other software companies, they believed it.
And I agree that this was planned all along.
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