There's a difference between an IoT manufacturer going out of business, which causes related software services to terminate, and an IoT manufacturer failing to deliver on device claims made before the sale took place.
There's also a difference between how we want things to work, and how they actually do.
These services typically include some language in the EULA to the effect of, "We can disable parts of this device from our end, for any reason, at any time." And agreeing to those is almost certainly precondition for using the device.
Which absolutely sucks. But it's the legal and consumer protection environment we live in right now. Pretending it isn't is -- hang the downvotes, I'm gonna double down on this -- pollyannaish. Until things change, your only real recourse as a consumer is to refuse to buy products that are sold under those sorts of terms. Which, unfortunately, does mean steering clear of IoT devices that rely on proprietary cloud services.
