Even though It might be a simple error on Apple's end, this is both morally and economically unacceptable. As long as it is not a top-high critical issue with the account or the application, a considerable time should be given to developer to solve the issue.

They can even freeze the money that goes to developer until the issue resolved, but cutting the app from the market and failing on both app users and the developer?

I don't think this is the best approach.