Enter the "fart apps", ie. low-value applications that do one thing (poorly), but only cost $0.99 or are free, providing downward pricing pressure for everyone

Enter the "fart apps", ie. low-value applications that do one thing (poorly), but only cost $0.99 or are free, providing downward pricing pressure for everyone else in the App Store. Unlikely. A fart app has comic value on a phone because you can pull it out at the bar and use it to show off your iPhone while you're drunk. The comic value is seductive enough while drunk that your friends might buy it too, hence perpetuating the plague. I'm not sure how laptop or desktop based fart apps would propagate, however. Would you download, even for free, a application that produces fart noises on your laptop? Dubious. The rest of your scenario doesn't worry me so much. What does worry me is if they build hooks into the OS so that signed apps distributed through the app-store have greater privileges (e.g. with respect to playing DVDs) than other apps. This would finally be a way in for the so-called "Trusted Computing" initiative which would lock down your own machine against you (unless you jailbreak your mac, which seems just wrong). Even with that, people will still find ways around it, but given that Apple did at some point agree to implement DRM restrictions on music files distributed through iTunes I suspect they'd also implement Trusted Computing with a bit of arm twisting from the MPAA. That would suck a whole lot more than the tragic disappearance of boxed software (good riddance).