Matt tried to extort money from WP Engine, then blocked their users from receiving updates, stole their plugins, and banned their developers. The filing in WP Engine vs. Automattic gives the details.

> Is the entire drama that WordPress is asserting a trademark over 'WPEngine' (i.e. 'WP'), and WPEngine disagrees?

That is a minor issue in the disagreement.

The bigger issue is that WPEngine had its access to Wordpress cut off on very short notice for questionable reasons.

This obviously had a negative impact on WPEngine’s business, but also on all of the business that WPEngine served. I think the latter part is what has a lot of folks up in arms — the collateral damage was really tone deaf (imho).