Kalphiters service still does the job, just because people think he's a douche doesn't mean the servers work well.
If Lub's ends up being similarly priced and has all the features we've been told about, Kalphiter will just have to hope his clients are too lazy to go to Lub's and don't want the extras. I don't see why any new client would pick Kalphiter's service, in its current state, over Lub's (hypothetical) service... unless they factor in anti-Lub sentiment.
I think Kalphiter will continue to tweak his service to try and be more competitive with Lub's when it goes public. You could criticize him for not doing anything sooner, but since there has been no alternative, there has been no reason.
Probably shouldn't be getting personal though. I'd rather see Lub promote his service rather than team with Ephi to give us pages about why Kalphiter sucks.