I saw an analysis of their Terms of Service somewhere, indicating that they will only compensate up to the value of the service paid. So, if your service was $100/mo, they'd only compensate you for the downtime you experienced, or up to that month's service charge of $100.
If Linode cares about Bitcoin, it will find a way to compensate its users. Otherwise, if the users who lost money are up to it, I'm sure there is at least one lawyer out there willing to be counsel on the first case involving theft of a digital currency, testing whether or not the data/rights to data stolen are legitimate property of legal value. We supporters of Bitcoin say, "Of course!" but it's not until there's a legal precedent that we really can say that.
Or, Linode can sit behind its ToS and test contract law.
Or, the users can vote with their money and leave Linode and tell others why they're leaving.
At least in my eyes, that I would ever consider Linode in the future is hanging in the balance, and they've previously always had a good reputation in my mind. I would venture that there are plenty of other like-minded geeks out there. Given that Linode's market is primarily we geeks, I believe it behooves them to do the right thing and compensate for the losses.