What's the big deal? Just delete the data. Customer pays for storage. Company stores. Customer stops paying for storage. Company deletes. Sure, a bunch of pissed off people will certainly be upset - but it's not the company's fault - they shouldn't have to bear this burden. I can't see how they could be sued by users for this, they didn't enter into any kind of agreement with the users, only with the customer.
Users don't care about that. Yes, some users are totally legitimate. Dropping their data because someone, somewhere thinks that the original service in general was 'evil' is not a solution that is as straight-cut as you'd like to present it.