This has always been true though
The classic question always comes up-is it worth buying a company or finding a way to steal their ideas?
And actually, I think life might be getting better for innovators because of cloud computing and cloud services. The more locked in to a service a user is, and the more 'social' it is, the less easy it is to switch to switch to someone else's, and the more tempting buying up a company with its embedded user base and mailing lists becomes. So Yahoo knew that they could never build a Facebook killer, they had to buy Facebook and integrate it into themselves.
(Side note: goodness, what would have happened if Zuckerberg had let himself be talked into selling his company into Yahoo's soiled hands?)
What I find amusing if not sad is that now there's even less interest on the part of young companies in making a profit, though, because of the need to grab lots of customers. Instagram made itself free in order to get millions of users in order to be valued at billions and bought by the Zuck. I don't think it ever saw itself as a revenue-earning company, just a giant piece of bluff.
I think the big question here is what Twitter's plan is. How much longer can they keep losing money? Do they have a path to profitability or do they hope to be bought up by Microsoft or someone?