Interesting that iCloud backups actually upload the apps from your device rather than just noting "you had XXX app version XXX" and redownloading it from the App Store on restore.
Going further, even the prompt to "delete and then re-download apps due to insufficient space for OS upgrade" seems unnecessary, as if revealing an unimportant implementation detail. Why can't it just automatically do the right thing? I won't mind if the app is missing from my iPhone for a couple of minutes. If the reason is bandwidth, perhaps it could say "we'll do this on wi-fi only."
Similarly, I wish purchased iTunes media started working the "streaming" way, too. I don't want the TV show to take up Gbs of disk space, don't particularly care for the physical file present on my disk. Could still have an opt-in "use offline" option for those who need it.
Or are these all issues to appease people who want to feel like they "own" content (apps, media, etc.)?
If an app is "completely gone", it probably has a good reason not to be there in the vast majority of cases.
Cold comfort to those who paid for said app.
So want to take away my right for the app I legitimately purchased and downloaded to my PC for later installation ? This cloud BS has really taken its toll.