I have heard that Apple can actually turn off particular users' apps on their devices, but this isn't necessarily the case. I bought NetShare (a tethering app) and it was later pulled from the store, but it never disappeared from my phone. (Now I never actually got it working, but that's beside the point.)

So I would say this is only bad for the user in the sense that they might not be able to have all the cool apps they want because (a) they may be pulled before they can purchase them or (b) they may never be developed because it's too risky to make them with Apple's fickle review policies.