I don't think that's really the problem here. My favorite tetris clone (quinn) was pulled for a while because the developer ran into legal issues with the Tetris Company.
So if Tris wasn't distributed through the app store, this likely would have happened anyway, just mainly involving the developer and the Tetris Company, not those two and Apple included.
Not debating that, but without the AppStore-only solution people still enjoying the game would be able to distribute it to friends and what not without having to deal with the Tetris company.
When the AppStore is the only way to get applications for a non-jailbroken iPhone, you lose that option and having something pulled from the AppStore means it's gone for everyone.
Technically, the developer can distribute it to friends. He's in the iPhone developer program, he can use the ad-hoc distribution method to send it to friends. I suspect if he "released" the source, any person in the program could do the same.
But yes, I understand your point. The app store model has some benefits and some downsides. The simplest thing to do is to just not buy an iPhone or develop for one if you dislike the model. I know that I don't like some aspects of it from both a user and developer perspective, but I like it more than what I had to deal with when I had other smartphones/PDAs.
So if Tris wasn't distributed through the app store, this likely would have happened anyway, just mainly involving the developer and the Tetris Company, not those two and Apple included.