At this point, the most notable part of the letter is that Reinhart claims that, when she and Rogoff were talking to policymakers, the policies they advocated were not the ones that the austerity crowd used their research to justify. In some cases, that assertion is very much true. In other cases, Rogoff at least is documented as being a champion of the debt-justified austerity measures that he is now trying to distance himself from. For example:
"Absolutely," Rogoff said. "Not acting moves the risk closer," he explained, because every year of not acting adds another year of debt accumulation. "You have very few levers at this point," he warned us.
Krugman responded to the letter on his blog, and he (rightly, in my opinion) chose to focus on the intellectual substance of the debate and reiterate that it's misleading to imply that there is some sort of dropoff point at a 90% debt-to-GDP ratio where economic outcomes become catastrophic, since that isn't actually what the data shows. To make this point a bit clearer, UC Berkley economist Brad DeLong was kind enough to translate Krugman's argument into the language of graphs.