Easy. They were keeping you as back up. They were not sure if their most preferred candidate would accept the offer, so they kept you in a loop until the other person joined. Looks like he did.
I understand the company fucked up but why does the article only talk about the company and not the intelligence agency hacking into companies to get information?
The CTO just said the truth. How else would he say that the customer's data will be deleted? Sure it was straight up blunt, but I think he was just speaking casually.