First of all, there will be hardcore porn immediately. Boob apps will flood the store, because that's what makes money. If apple implements a flagging mechanism, then you will be one click away from opening a website to purchase hard core porn (I'm looking at you On The Go Girls).
Lots of people will create apps with 5 pictures and call it "Celebrity News". For example Britney Spears News, etc. Apps will be rereleased every single day so they are always visible on the app store new releases page. People will upload apps that do nothing but just have a title people will search for. And of course, apps that call a pay hotline somewhere.
With the amount of money people are spending on the app store, and the fact that people are looking for cheap entertainment rather than useful tools, the app store would be a heaven for spammers and scammers.
If Apple ever unlocked the gates, it would be the absolute end of the app store.
I have a phone number of a reviewer and I talk to him every now and then. They get a lot of crap. The gate is not to QC an app, it's to prevent the app store from being a crapware and spammers paradise.