Nintendo takes down fan content all the time and even stopped a smash bros tournament because the event holders were going to use an emulator to play SSB Melee. I can understand protecting their assets and license here though as Pokemon are meant to only fight each other in a world with no physical harm usually being shown.
I hope the creator of this mod keeps his enthusiasm though! It takes a lot of work to create something and the feeling of it being taken away so suddenly must suck.
RE: Nintendo kills the Pokémon FPS