I agree AH has better things to do than concentrate on small aircrafts (EC120D) when they now have tons of capital and assets to sell EC225s and other high cost ships to the militaries of the world .
Regardless the demonstrator shows that it is possible to have a 5 seat piston helicopter without compromises (either look or performance).
In the best case Guimbal (maker of the Cabri G2) should inherit that technology and make a cool next generation aircraft around it. You know Guimbal has been a protégé of Eurocopter in a sense, and adopted a great part of the EC120 technology concepts (rotor head, avionics presentation, fenestron...)
Why EC did let it happen and even fostered it, I assumed they knew it was not attacking the piece of the pie they care about or would care about in the future. They could have strategized in a sense that it was better to have a known quantity fill that market hole.