But if the developer has, for whatever reason, chosen not to update the app to support retina displays, larger screens, and anything else that would benefit the user, isn't that an indication that the app is abandoned? Even if the functionality doesn't fundamentally change, it's not a good sign if the look of the app has been neglected.

I'm sure the vast majority of apps this affects are mostly rotting away with broken functionality. Worse still, there are many apps that could definitely benefit from newer APIs. There's no doubt that this new ruling is going to have some edge cases where old, but perfectly functional, apps are lost - but there is a grace period that developers of these older apps can work in to update them and keep them listed.

This is a good compromise - Apple issues a store-wide ultimatum to developers and any that are still interested in keeping their apps listed will update them. Those that aren't will need to do nothing. If any of your apps disappear, it stands to reason the developer has abandoned it.