The bad: it will be more difficult for non-Google app distribution storefronts to jump-start their catalog by grabbing APKs from the Play Store, because they won't be able to get one neat APK per listing via some APK downloader. (For apps that do want to get listed on those storefronts, life won't be very different.)
The ugly: APK distribution is a "zero-trust" model which allows the developer and the user to not have to trust the store not to make any changes to the application. In fact that's what prevents the kinds of "good" optimizations mentioned above: Google can't reach into an APK to strip resources that are irrelevant to a particular device, because doing so would invalidate the APK's signature. By forcing apps to be deployed with keys under Google's control, this trust model is broken. The Play Store no longer guarantees through cryptography that APKs haven't been tampered with between the developer's build system and the recipient device.