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I think it was a very brave decision, but it could have given a serious backlash.
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Not likely any backlash. If her book is very successful, the publishers will come back with a better offer. Nothing sells like success. A lot of conjecture is based on new authors, but many books put out by publishers were self-published before contracting with traditional publishers. The best example that comes to mind is the late Vince Flynn. He was actually turned down by 3 publishing houses before choosing to self publish. Part of his success, of course, besides being compelling stories, was that he had physical books that he could provide placement in stores. That's a hurdle that self-publisher's have to address. They have to market their ebooks. How do they get to the audience that doesn't seek them out? How do they get the attention of readers like Cat who will no longer read self-published books because she's been burned by them? And yes, how do they get themselves into libraries? I know my library system will not buy or even catalog self-published works even if donated, although they have made occasional exception for non-fiction. They need to get their works reviewed positively by professional viewers, if they want to get into the library market.
edited to add: Seems to me that they should include in their blurb about the book that it was professionally edited (if it was).