Twitter: Don't build core-feature Twitter clients, we probably won't approve them. Atta: I built a core-feature Twitter client! Twitter: Sorry, we're not approving your core-feature Twitter client. Who is surprised? How is this news? Were you expecting them to not apply their own rules? It seems like a clear-cut case, and concluding "don't build anything for Twitter" is just throwing a temper tantrum.
I will add that, if the developer had made five dollars on each sale, he or she would now have a half million dollars, but I'm assuming they didn't, as the story is pitched as a tragedy rather than a triumph.