Why Blue Security Folded

Interesting - Blue Security did indeed hire Prolexic to fend off the massive DDoS against it. Prolexic is a hosting company with cables the size of sewage pipes supplying its servers, making it extremely resilient to denial of service attacks. In response:

We understand that once customers of Blue Security started receiving real threats of viruses/worms/DDoS/etc. attacks against their own networks, Blue Security realized that they were putting many other businesses in jeopardy by continuing the fight with the spammers.

Fortunately, it seems that the Frog is to become Phoenix and resume breathing fire shortly.