I personally felt at the time that there wasn't enough fan fare. The only place it was being heavily advertised at was Romhacking.net and Youtube. I'm not even sure we ever linked to crimsonechoes.com anywhere in the forums. ZeaLitY last mentioned Crimson Echoes on the frontpage in February I think, but after that it was pretty much chatter about "CE" except where it was being advertised.
The "problem" may have been that the advertisements were just too high quality. I mean, if you happened to find your way to crimsonechoes.com, you'd be blown away by the artwork and the overall professionalism of the site. If Square had either been following the project closely all this time or else was drawn to it recently by the denunciation letter (if it was real, which I still have personal doubts about), it's easy to see in retrospect why they might have felt threatened. CE was literally the highest-quality product ever to have arisen from videogame modding culture.
But here's an odd thing: during the viral advertisement run, CE was never described as a "ROM hack." Of course ROMhacking.net frequenters would already know what it was, but I think the CE team was going for a mysterious impression. People could have mistaken it for an ambitious Flash or RPGMaker project until it was actually released.
The first instance of anything remotely related to game modification in the viral advertising run came on April 26, when I uploaded the second preview video to my personal Youtube account. It said "Coming to an Emulator Near You. Soon." Even then, only 150 people or so even saw it; the video didn't become heavily viewed until after the C&D. So I think SE's either been following CE for some time, or did quite a bit of digging if it learned about it recently. Thing is, had SE done that amount of digging, I'm still surprised at some of the claims that made it into the C&D.