This is what I gathered:

A team of hackers destabilized the realms to the point where they were able to merge ladder/nonladder for something like 6 minutes. They then proceeded to xfer old 08 dupes/imported/perfect stat items to Ladder characters (think of 08 gazes, 290's, 3/20/20's, Armageddon Fletch, etc...).

Apparently, some other people caught on in that time and did the same. This irritated Blizzard, who rolled back the realms.

That's the most complete picture I could gain from the confusion of posts on the 'net, so it may not be 100% accurate, but should be pretty close.