That photo is the classic reason not to have gutters. The ice appears to have backed up in the gutters and gotten under the sheathing into a cold soffit. Ice and water shield wont do a darn as its applied to the top of the sheathing. Rain deflectors mounted down low may survive (broken link removed). I will occasionally get large icicles on mine but never had any backup in 20 years. Taking the gutters off works but most folks leave them off and hopefully their foundation drainage system work well. I had gutters on my garage and after 3 years of ice buildup I yanked them off and never put them back up.
Alternatively if they had run a strip of heat tape along the gutter and down the downspout I expect they wouldn't have any issue.
Alternatively if they had run a strip of heat tape along the gutter and down the downspout I expect they wouldn't have any issue.