The latest release apparently also shuts out anyone with a non-stock ROM or root access to their own devices.
They had made hints of threatening to do that to Ingress some time back but never got that heavy-handed. I suspect Pokemon has a much higher profit margin and they figure they can shut out a whole bunch of players and still rake in tons of money, at least for a while.
I hope they reconsider - there is plenty of room to complain about problems with the gameplay and its limitations, but I'm not going to lie, it's still kind of fun. I'll keep playing it as long as they allow me to - I'll probably even break my usual rule of not wasting real-world money on "virtual" crap once in a while (already done it once). If they shut me out, though, I guess I'm done playing.
(I literally can't go back to the old unmaintained S4 firmware any more for any reason, let alone just to play a game - Samsung's notoriously bad hardware QC bit me again, my USB port no longer works for data, though it still charges for some reason. Not sure how long it was broken before I noticed since I do file transfers over the network via sftp instead of using a data cable, but it means I can't use heimdall/odin to even put back the original firmware and recovery partition any more even if I wanted to.)