There are a number of reasons why we did this, and I'll be happy to discuss the reasoning below.
To be honest, we have wanted to do this for some time. However, we didn't want to remove 'all posts' unless posts from new users could still be seen, and new content could easily be found. We think we have found an approach that will work.
In the upper right on your feed, you can see an 'external posts' menu. With this menu, you can now choose how many (and if any) external posts will appear in your feed. These posts are not from people that you follow, and they have not been shared with you. External posts have a light grey background.
I'm pretty sure that this will require some tweaking, but it needs some road-testing first. Let's try it out for a few days, and see how it feels.
Of course, feedback is much appreciated.
In addition, we have increased the number of people that you can follow from 50 to 100.
p.s. For those of you that requested Hubski stickers (http://hubski.com/pub?id=15526), I'll be sending them out this weekend.
p.p.s. You will probably need to refresh your browser to see these changes properly. (Sorry kleinbl00:))
UPDATE: I realized that we are not pulling in enough external posts. (Some differences between the test data and the production site, it seems.) I'm working on it.
UPDATE2: I pushed some changes to the pulling in of external posts. It can be a little uneven; if you are following a lot of people that have recently posted, that will force out external posts. But, that also means that it is unlikely that you are missing much new content. Also, I changed the options to 'few' and 'many'. Because the external post grab is uneven, IMO the granularity of choices need not be very high.
UPDATE3: I cleaned up the menu so it looks less janky, and I swapped grey backgrounds for blue text on external posts.