Overplayed his hand?
There are many Chinese people who managed to break through the great Chinese firewall and who didn't get into problems. I read stories about situations where local law enforcement is fully aware of some breaches but will simply tolerate it as long as it's not being (actively) "abused".
And I think that's the main thing which got this guy taken out. It's one thing to breach the firewall, it's another to actively promote it and sell it as a service. Stupid, stupid, stupid.