Our group had this happen once, but it was a bit less acrimonious. (Mostly because the person who left for a while was mature about it and didn't phrase it as an ultimatum.)
See, one of the people we used to play with was a girl with a lot of deep personal problems and a tremendous fondness for drama. When she was in the right mood, she was a fine player, and everyone could have fun. The problem was that she wasn't in the right mood more than once out of every ten sessions; the rest of the time, she was sullen and withdrawn, refusing to participate, refusing to let other PCs draw her character into whatever was going on in the game, and at her worst, endlessly complaining about the game itself.
This got worse over time, of course, and eventually we got rid of her. Somewhere in the middle of that ordeal, though, the wife of our usual GM opted out of playing in any group that included the sullen girl. (She has an admirably low tolerance for self-pitying bullsh-t and wasn't interested in putting up with it from the sullen girl any longer, and anyway, she wasn't terribly interested in the next game we were playing.)
Which was a fairly classy way of handling it. Our GM's wife didn't say "it's her or me," she just looked at the situation and said "Hey, I'm not going to have fun when the sulky girl is there, so I'll just come back after she's gone." Because, after all, she knew that eventually even the most serene-tempered of us would be sick of the sulky girl's drama, and she'd leave the group to go deliberately alienate other people.
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which she did, so now our group's doing fine again
ryan