As an iPhone developer myself, I generally disliked Installous. When my first game launched back in late 2009/early 2010, I had 50,000 users my first weekend... but just 45 sales. Unfortunately, I'm not joking. I got disillusioned with the process and never made another app. I finally let my dev profile expire last month. By the end of its run, my game's user base was about 5% paid, 95% pirated. Perhaps most painful were the stats I was getting back: The average time the pirated versions were played was well over 2 hours (nearly as high as the paid average of 2.5 hours), and my game was priced at $.99. When someone gets a couple hours of enjoyment out of a game you spent months developing and won't give you a measly dollar, it hurts.
On the other hand, I've benefited from Installous at least once. I was hesitant to pay $20 for a niche app that appeared to do what I needed, but it wasn't obvious. The developer was very slow to respond, and it had no trial version. With Installous I found that app did what I needed, so I purchased it in the store. Everyone was happy.
So if anything, I have mixed feelings. I suspect the loss of this will reduce the demand for jailbreaking, which I enjoy for other reasons (BiteSMS is perhaps the single greatest app available for the iPhone, IMO). That's a bad thing.