I call it cargo-cult because Shuttleworth makes UI decisions like "move the window buttons" to semi-emulate OSX, but seemingly without doing any research as to why such might succeed or fail. Originally they were even in a different order--his only concession to angry end-users was to arrange them like OSX, in a different order than originally envisioned. Or take the indicator applet: his complaint was that the regular system tray icons are cluttered and disorganized. Solution: reinvent the system tray (which had fairly clear HIG defined by Gnome, which for the most part were followed), almost bit for bit, but with different colored icons, no tooltips, and no default left-click action. If you look at the old system tray and the new indicator applet, they quite literally are almost identical in appearance/clutterdness (yes, he merged mail and IM, and with Maverick merged volume and the music player, so that's two less icons, but the usefulness of those changes is up for debate).
I call it a dictatorship because big decisions like that are made by him, seemingly by fiat. He even calls himself SABDFL (self-appointed benevolent dictator for life).
Shuttleworth is trying to be the Jobs of the OSS world--making design decisions because he thinks he knows software design best. Which is fine--like you said, he's paying for it all. But the difference between him and Jobs is that Jobs defines useable software where Shuttleworth just copies and reinvents. And in my opinion, Shuttleworth doesn't seem to have the insight into users' thought processes that Jobs has.
Again, you're right, the man is paying for it all, so who am I to complain? I can just pick a different distro. But the problem is that with all of these more serious stability problems remaining unsolved and stuff like windicators and indicator applets and fonts getting all the attention, I and others might eventually get fed up and switch to a more stable distro (does one exist? Will I go back to Windows?), or not recommend Ubuntu to friends.
What should I tell my friend: Yeah, install Ubuntu, it's great, but whatever you do, don't let it automatically update because your laptop might never suspend correctly after that?