It's still not clear yet either why Blizzard is doing this -- originally, since they started off going after only paid applications, it was plausible that they just didn't want other people profiting off of their game (similar to the new addon policy). But they've taken down both free and paid apps here so far, and Double Bubble also has a list of both free and paid addons still up. At this point, we have to wonder what Blizzard's real intentions are here -- they're squashing valuable resources that fans have made and are giving away for free. If they were planning an Armory or realm status app of their own, that's one thing, but the only reason we can see so far is that their legal department has decided to act against the company's own loyal fans for their own interests. Not a great strategy for encouraging customer loyalty.
And what about sites like Wowhead or the Firefox realm status addon? Why is Blizzard only targeting helpful applications on the iPhone? We can only guess that Blizzard will eventually go after the rest of the apps on the App Store, so if you're working on one or planning to release one soon, guess you might want to think again about how that time might be better spent.