I believe this is the quote from Twitter -
"We’ve had conversations with UberMedia, the developer of these applications, about policy violations since April 2010, when they first launched under the name TweetUp – a term commonly used by Twitter users and a trademark violation. We continue to be in contact with UberMedia and hope that they will bring the suspended applications into compliance with our policies soon."
I agree with you entirely Mark that they can handle something like this better, but I think that a company like Twitter that is still figuring out the best way to monetize has a right to enforce their trademarks to reel in other people trying to make money off of their product.
Then again, at a $4-10bn valuation, they probably can afford to not cut off things that make their users happy.