It's weird, I deleted my reddit account and signed out of baconreader but left the app installed. I just checked and the app still works and loads posts.
Based on the wording of the error message, it sounds like they will display that message when they're unable to receive posts from Reddit Servers. They may not have revoked the API keys and if people use the app, they might get posts, assuming there's quota in the free tier to get a response.