I feel bad for the developer. But every time I see stories like this, I also feel a little jolt of validation regarding my choice as a developer to leave the Apple ecosystem in 2008.
At the time, the App Store (iOS) was new, and I was working on porting our SSH-based encrypted remote access tool[1] from Mac to iPhone. I had been doing mainly Mac OS X development for almost 10 years.
I had the proof-of-concept port from Mac to iOS working, but the amount of insane hoops I had to jump through (because it used "strong encryption" (we forked PuTTY SSH)) seemed, initially, like a trip the DMV. It gradually started feeling more like the movie Brazil.
I remember going directly from WWDC to the local office of (searches old files) the "Bureau of Industry and Security" (wat) and talking to some guy who had NO idea what I was talking about when I told him my company was trying to make an iPhone app that used encryption and that Apple had told me I needed to get his agency's approval. (Nice guy, though.)
Ultimately, working through the Apple documentation, I learned I had to do a bunch of weird stuff, like sign up for antique government systems that only worked on Windows XP, and provide personal info, and make a PIN, and submit an application to SNAP-R, and submit a "BIS-748P supporting document: how the Product meets the criteria of the Cryptography Note as mass market encryption software" along with a "BIS-748P supporting document: additional information to supplement our application for review and commodity classification request, in accordance with Supplement No. 6 to Part 742 of the EAR" along with "BIS-748P supporting document: sample marketing copy and brochure text" and a "BIS-748P supporting document: illustrations depicting the software in operation" and then finally a "BIS-748P supporting document: source code listings for all encryption-related source code used in the product"... that last was a ridiculous 500-page or so hard copy printout of the source code to PuTTY with the few dozen places we'd changed it (to make it multithreaded to fit better with our app architecture, haha, because I was young and dumb then).
And, while I forget a lot of the details (I've just copy-pasted those now, after finding the relevant old files), I remember vividly the moment, sitting there in a Tokyo hotel business center assembling this heavy paper package to FedEx to BIS and just suddenly thinking... wait though — maybe this isn't a game I want to play. We didn't have to do any of this to ship a Mac app — any risk of legal noncompliance was ours, of course, but in reality there was no actual risk. This was all for Apple to cover their ass.
If some government bureaucrat didn't like my application, my app wouldn't ship and the past year of work would be for nothing. And somehow that made me acutely aware that the same thing would be true if Apple for some reason didn't like my app. Like... what if they were planning to roll out similar rich, Mac-centric remote access features in the next OS update. Or, even if they approved it, but later just didn't want to deal some issue that arose around it — they could just revoke my app any time they pleased.
(As seems to be the case with the app in this thread.)
I thought about this for a couple more weeks, and then I took a corporate job doing internal systems development. The app was never finished.
The lack of my app obviously didn't hurt Apple. But looking back, I do feel like the lack of having to deal Apple — and that whole weird power imbalance, of being a peasant plowing fields owned by Apple, hoping to receive some part of the fruits of my labor — probably helped me live a more serene, untroubled life.
[1]: iGet Touch (phone apps were still called "blah blah Touch" then, just like many Mac apps from the early 2000s were idiotically prefixed with "i" (^_^); back then) was never finished — but it was basically a native iOS version of the Mac version, long dead but still archived here: http://nakahara-informatics.com/iget