I actually think this is sort of a dumb argument to get into in the first place, but you have to admit that not letting the original submitters to own their titles (when you allow them to own the resulting karma) is kind of inconsistent.
Ultimately, though, this sort of user revolt is bound to happen whenever you make major changes to how a community works. I think news.yc'll make it with or without the people who are pissed.
Well, I've personally had titles edited, all for stylistic issues (none for bias, innaccuracy, or anything I'd deem worth editing). I don't really care, but I would prefer that unless my submissions were clearly in need of correction that they were not changed. They do show up under "submissions" clicking from my profile, so I think they ought to reflect what I submitted unless it harms the site.
Ultimately, though, this sort of user revolt is bound to happen whenever you make major changes to how a community works. I think news.yc'll make it with or without the people who are pissed.