As a dev, now I don't need to build a full iPad app. This move is bad for Apple longer term.
That would be a bad move for you to make. There are loads of apps optimised for iPad now. The standard has been set quite high, and users expect real iPad apps. If you can't be bothered to make one, then you risk being left behind.
I suspect its entirely because the iPad has such a good app ecosystem that Apple feels they can lift this restriction and not force developers into making iPad apps. They probably consider competition between developers enough of a force to keep things moving in the right direction.
The only iPhone apps I allow on my iPad are the ones I deem absolutely essential, namely, by bank and credit card apps.