What is the story behind the attack on Coiledcoin?

Since Coiledcoin launched with merged mining, Luke Jr was able to use Eligius' combined hashing power to execute a 51% attack against the new block chain. Additionally, the Eligius-mined blocks contained no transactions, effectively slowing the function of the Coiledcoin network to a crawl.

Miners on Eligius suffered no monetary loss since merged mining does not affect the hashing power on the primary network and this is an excellent example of a pool operator performing merged mining without the consent of the miners.

Eligius miners were not consulted prior to the attack and it's been stated publicly by at least a few major players in Eligius' network that they do not approve of the attack. Eligius states that his major motivation was to prevent the damage caused by the pump-and-dump schemes that most of the alternate currencies typically represent - a large number of coins premined or mined by early adopters which get sold off rapidly, collapsing the altcoin's new economy and effectively destroying the project. He incorrectly referred to them as "pyramid schemes" though, in at least a few cases, he is probably correct as identifying some altcoins as "schemes" or "scams."

Even some miners (myself included) who agree with Luke Jr's assessment of the altcoin pump-and-dump scenarios disapprove of Eligius' actions since the attack happened without the consent of those actually responsible for it, even when such consent would likely have been given. There is, simply put, a great deal of resentment about not being asked or given any option.

That said, the effect seems to have been felt quite little by Eligius regardless of public opinion surrounding the fallout. At the time of the incident, Eligius was reporting combined hashrates of ~250GH/s and today is reporting hashrates upward of 440GH/s. However much this may have hurt public opinion, it certainly hasn't hurt business.

Edit: Since certain people are disputing the above, here are some references:

Here's LukeJr directly admitting on the forums that he "foiled the scammers" suggesting that miners might leave Eligius due to his misuse of power.

He has since backtracked and claims that he didn't actually use Eligius' hashpower to perform the attack, that he only used his own computers, but regardless of the methodology this is a Bitcoin core dev who is directly and admittedly responsible for the intentional destruction of an altcoin, an act that caused probable financial loss to many innocent users and that likely contravenes multiple computer crime laws in multiple jurisdictions.