What Strato did is - as you would expect from Strato - rarely stupid. Terminating a contract before the domains have been moved is recklessly careless. Especially since you know what kind of outfit NSI is. Nevertheless, of course the behavior of NSI - as you would expect from NSI - is outrageous and in my view unacceptable. The company should be shut down - their business practices happily operate in the triangle of spam, extortion, and fraud.
At heise online news you can find the original article.