I have a friend at Google that says the real backlash was internal, and he thinks Matt Cutts even threatened to quit over this.
(I'm a Google employee)
Internal backlash was massive, and as far as I can tell hugely stronger than the fairly mild complaints outside the company. The strength of the internal opposition took me by surprise. I understood that while Google doesn't wish to censor the web it also doesn't wish to be the entity serving up sexual content. That seems like a reasonable position to me. I thought the 30-day notice was a bit short, even though the terms of service only offer 14 days, but other than that it seemed reasonable to me, basically bringing blogger into line with the policies in place for YouTube, etc., for years.
Many of my colleagues, however, vehemently disagreed, calling it censorship, application of one region's values upon the world and generally declaiming it as the beginning of the end for Google as a force for openness and access to information. Many called the decision deeply inconsistent with Google's stated mission, "To organize the world's information and make it universally accessible and useful". The internal memegen system was awash in anti-censorship memes, and one of the memegen team went further and more or less shut the system down in protest, replacing it with a complaint about the blogger shutdown. Eng-misc, a high-volume internal mailing list for random discussions of, well, anything, was overrun with threads complaining about it. The founders got hammered with questions and complaints in the weekly company-wide TGIF meeting (which is actually held on Thursday these days, so more Googlers around the world can see it live).
It's been quite the storm.
As soon as the internal reaction started I expected the reversal, though it went further than I expected. I thought the result would just be more notice, maybe 90 days. But I suppose that's because I thought the basic decision was reasonable, and only the short notice unreasonable. Many others felt differently, obviously.
It's going to be interesting to see if this provokes re-examination of the YouTube and G+ policies. I doubt it, but I was wrong about the nature of the reversal, too.