While I don't have problem with people working on fan translation scene asking for donations, NW's approach to it made me bit uncomfortable.
Then you're a lot more tolerant of those kinds of things than I am. In my eyes, fan efforts, be they fan games or fan translations are what they are because the sole motivation behind them is love of the series and the desire to let more people experience and enjoy them. (hence the "fan"-part) Once money enters the equation, even as "donations", the venue stops being a fan effort and becomes a commercial business, in this case one that makes money on the back of someone else's intellectual property and one that Falcom was in its rights to issue a C&D to.
That's purely based on NW's decision to try and draw monetary compensation out of it and not based on his inability to avoid coming across as Alex Jones' angry little brother.