While I don't agree with the recent changes, I understand why itch has made its decision, and why the Card Payment Industry is interfering, possibly beyond its reach.
For itch, this has hurt it reputationally, and will hurt it financially, but it needed to be done, for now.
In a world where social perception and media is driven by scandal and half truths, an opinion can snowball into a movement that can lead to incredibly damaging consequences.
Big business knows this, and has known for a long time the damage that can be done if they are seen to do nothing when someone vocally disagrees with their operations, even if they have little to no control over the root cause of the negative perception.
For itch, acting on this perception means the loss of a substantial amount of revenue at the behest of the Payment Card Industry.
For the Payment Card Industry, the claims against them or itch, even if unfounded, risk substantial reputational damage to them, and possible other consequences.
Their fear is not what itch supports, or even the claims being made by 3rd parties. What they fear is their businesses being held accountable for enabling the funding of what could be considered as extreme content.
If they are seen not to act, and the situation escalates, their operations in providing services to itch, on a global scale, could be viewed in some countries as corrupt, illegal, money laundering or fraud.
Even if the claims are unsubstantiated there is still a risk of these situations escalating to court cases in different jurisdictions that can both be time consuming and expensive. Add on the likelihood that at least one of these cases could occur in a country with a corrupt judiciary, then the risk of being held "accountable" becomes a reality. This would set a precedent for other nations to equally try to hold them to account and could result in their businesses being prevented from operating in those jurisdictions, and potentially, any allied jurisdictions.
The loss of potential revenue from making these actions vs. being blocked from trading in entire nations makes it a no brainer for the boards of the Payment Card Industry.
This is likely why they have chosen to interfere with sites and services like itch.
I don't condone or agree with it, but when public opinion is swayed by fear and scandal, this is the logical result. Even if they are eventually legally restrained from this type of interference in some countries, they will always try to reduce or remove such risks because the cost of mitigation is always substantially less than the cost of the risk becoming reality.
There may be ways that itch can manage this situation, but from the sounds of it, they have some work to do.
I will still use itch, as a hobby/learner dev, it is still the best place for game jams, and I hope that itch can find a balance that works for everyone.