The shutdown is a protest. According to Katharine, account creation (outside the US) on the Teen Grid was down 18 months out of the past 24 months. Allegedly, Linden Lab seems to abandoning the Teen Grid completely and not caring if it works or not. No wonder they're not worried about a lack of new residents there.
We have obviously no way to verify this, of course, but it seems pretty serious to the point that Katharine, usually a calm person when dealing with LL's refusal to deal with issues on the Teen Grid, is actively protesting this time.
Katharine claims that residents using AjaxLife, which runs from Amazon's virtual server platform, consume about 100 GB of traffic per month, for a total cost of around US$120/monthly, which comes from donations.
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