It's most likely those folks buying the app at $400 thought it was $4.00 or just misclicked. And then they complained to Apple about improper charges on their credit cards, which causes chargebacks, which causes problems for Apple, which causes them to remove the problem at its source. It's just Apple trying to maintain a positive user experience, nothing more.
I assume you are joking.
Huh? I don't know why this has been voted up and the parent's reasonably logical explanation voted down. The app in question even had something about it only costing a dollar in the description - even though the price climbed ever higher. IMO, what this guy did was fraudulent in spirit if not in fact.
No, idiots buy iPhones just as much as smart people do...
I would agree about Apple making sure of a "positive user experience". By changing the price you piss off those who bought too high. People who feel cheated do not make good repeat customers. And in this case I would have gotten rid of the problem the same way Apple did.