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This debacle was nicely covered by Derek Khanna in The Atlantic yesterday. Khanna points out that we never actually passed a law that said it should be illegal to do this. Rather, the DMCA - a law passed before smartphones even existed - criminalizes all kinds of activity like this. It's possible for the Librarian of Congress to create exemptions to the law but it's certainly not required, and it didn't happen in this case because the Librarian decided to let an exemption lapse.
My guess is that it'll be reinstated, because this sort of thing is ludicrous and it's going to generate a lot of negative publicity. However, I think Khanna is also spot-on when he points out that we ought never to be in the position of having to depend on prosecutorial discretion not to come down as hard as the letter of the law allows (resquiat in pacem Mr Swartz).