Dedicated servers was a plus to begin with. Allocating hardware is a costly exercise, and doing it for two people spending three hours trying to get out of Damnation doesn't present a huge ROI. They probably expect that people in custom games will, on average, be (a) closer geographically, (b) less demanding in performance and fairness of connection, and (c) more tolerant of others' poor connections. The bulk of the benefit comes from ameliorating the matchmaking environment, which has vastly more people with a much wider distribution of connection strengths, most of whom are there to win and don't afford strangers much tolerance when it comes to their ferret-powered internet.
The people who have the most legitimate beef with this news are people who play custom games competitively, i.e. no one here. Knockin' Zombs would not have been appreciably better on dedicated servers.
