Automattic benefits greatly from their close relationship to Wordpress. Using the power they have to threaten a commercial competitor that has a good reputation in the community will push the Wordpress community to reevaluate that relationship. The contributions Automattic makes to Wordpress are valuable but valuable contributions do not excuse bad behaviour. Souring the relationship between Automattic and Wordpress is a major blunder, which Matt will be responsible for. If Automattic lose their preferential treatment and are forced to compete with WPE based only on service then they will be crushed because Automattic’s offerings are not as good — there’s a reason Matt is so sensitive about WPE. Automattic are just as dependent on venture capital as WPE, even more so because of how their business has been losing focus. Automattic’s value is based on its relationship with Wordpress, whereas WPE’s is entirely based on the service. Matt is threatening Automattic’s most valuable asset, removing him may be seen as the only option to rescue the relationship.
As an aside, people don’t usually act like this when things are going good. Perhaps Matt is lashing out because of pressure he is already under.
edit: and to close the loop, Matt is demanding benevolence from WPE that Automattic themselves don’t engage in. Automattic own the Wordpress.com domain and promote their hosting service through Wordpress.org (which causes the exact confusion Matt accuses WPE of benefiting from). The money Automattic spend on supporting Wordpress project is not a donation, it’s quid pro quo. Would WPE pay $10m a year to own all that? Of course, any rational company in the space would… but that’s not what Matt is offering.
