Bummer for those who are affected, but it's not necessarily the end of the world. I think this has happened before and if you can afford to be patient, you should sign up for the waiting list and I expect that you'll eventually be compensated. As I understand it, the California state legislature allocates a pot of money for this every so often and it occasionally runs dry and then people have to wait for the next allocation.
Part of the explanation might be the big surge in Teslas that were sold in the past several months. I purchased my Niro last October and since that time, I've seen a total of three other Niros in the wild (two were in a campground in southern CA, the third was commuting north on I-15 a week ago). But in the last three or four months, I've probably seen two dozen Teslas driving around my area, where previously I had seen maybe one or two. I think a lot of CA residents were motivated to purchase Teslas before the federal credits expired and that probably introduced a surge that depleted the state's rebate allocation pot of money faster than anticipated.
The good news is that CA actually increased the rebates recently. People applying for the rebate that comes from their electric utility are likely to get $500 more this year than I got from my CA utility company in 2018.
2018 Niro PHEV Gravity Blue