The source of the brouhaha (at least, as near as I can tell) was that Harlequin was talking out of both sides of their collective mouth: on the one hand, they were saying that your manuscript wasn't good enough to be published by Harlequin Harlequin, but—but!—for the low, low price of $599.00 (packages run from $599.00 to $1,599.00), Harlequin Horizons would make you into a Real Live Author™! (Tragic character flaw not included.) The solution to this contradiction? Change "Harlequin Horizons" to "Dellarte Press." Et voilà! You no longer have a traditional book publisher playing a weird joke on you by asking you to pay them to publish your book because they didn't think it was good enough for them to pay you.
So yes, I applaud you, MWA (to whom I ascribed the mysterious laugh in this post's title), as well as the RWA, SFWA, and the countless other members of the industry who voiced concerns over this less-than-honest move by Harlequin. Yes, I think self-publishing produces absolute bilge 99.999% of the time. Yes, I think authors who self-publish are more often than not shooting themselves in the foot (feet?) if they want to ever make money doing what they do. BUT. I also think that those self-publishing companies have the right to do what they do so long as they're being honest about it, and most of them are: they're not offering book deals or literary stardom, they're offering to bind your book for you. When a traditional trade book publisher, however—you know, the fancy advance-and-royalty kind—starts getting in on the game, it's no longer clear where traditional publishing ends and self-publishing—dare I say "vanity publishing"—begins.
Sure, Harlequin can take their name off the press to prevent confusion, but if they've got to take their brand off a product in order to sell it, what is that really saying about them and their enterprise?