While " the island of Atauro, [may only be] 15km off the coast of East Timor (in East Timorese waters)," it also is pretty close to Indonesian territory (within Indonesian waters). East Timor and Indonesia continue to negotiate over borders and border demarcations, and are still (in some places) only at the survey stage.
That said, the past slaughter of Timorese by Indonesians cannot be excused or forgotten. Nonetheless, the brutal suppression of the Timorese probably represents a backlash against anything even resembling socialism/communism in the area, attempts of Suharto and his cronies to deflect attention from themselves by creating and maintaining national crises, unthinking attempts to impose conformity, unbridled bloodletting kept in check by Suharto’s authoritarian regime up until he left power in 1998, or some combination of all of the above. Indonesia’s politicians have long been keenly aware that any move toward autonomy on the part of any subculture/people group could precipitate a cascade of seditionist autonomy seeking that would result in the very dissolution of Indonesia as a nation. Cohesion is king in Indonesia -- and has naturally led to some paranoia and (at times) flat out abusive tactics.
I don’t think this incident represents either a return to past oppression, or the military getting cocky over SBY winning the election. I think it is just a border dispute. I think SBY will improve discipline in the military, and also will improve international relations in the region.