Apple pulled it from the App Store because GrooveShark, as awesome of a music app it is, unfortunately blatantly breaks copyright laws. As an end user, I can listen to music on other end users' devices and can also download the songs for offline playback. The record labels don't like this approach to music playback and sharing, to say the least.
I really think GrooveShark is one of the best music apps, if not the best. I love how I can listen to anything popular, or extremely obscure. It's a great music app.