Has it been removed from your phone?
If not, I would think you got what you paid for
I don't think it is that cut and dry.
EzFiles is an app that the dev apparently has decided to abandon or at least not sell or list in the app store (but has mentioned it on their site). I believe that with the knowledge that it will never improve could prompt a refund. However, the app works just as well as it did when it was in the store so I don't think a refund is in order.
I had a lyrics app that I paid 99¢ for. In one week there was an update then the next week it was gone. The dev said on his site for copyright purposes he was pulling the app voluntarily. I asked for a refund because when he did that he also killed the apps database rendering the app useless. I do not think the intent was to rent this app therefore, a refund is justified.
I have two apps pulled from the app store. Duck hunt and donkey kong. A refund would be nice.
I agree with your premise
If the App no longer functions as portrayed when you bought it, then yes a refund should be in order
GV Mobile would be an example, in my mind, of an app you should get a refund for. Because Apple pulled it, you couldn't get updates and now it no longer works.
Not the developer fault. Apple's fault.
These situations should trigger automatic refunds and it should be APPLE paying the developer side of the refund, since APPLE decided to pull the app.
However, if it is something that worked as represented and will continue to (a game, for example), you got what you paid for, you should get no refund.
IMHO
Since this question is coming right after Apple pulled 5,000+ apps from developers who thought they were following the rules, keep in mind:
1) Apple has the right to issue a refund and take it out of the developer's revenue. This is for 100% of the purchase price. So if an app sells for $0.99, the developer gets paid $0.70 and Apple keeps $0.29. But the contract allows them to 'charge' the developer $0.99 for a refund. Meaning the developer LOSES $0.29 for a refunded app, not just the $0.70 they would have made. Apple doesn't have to charge them the full amount, but they're entitled to.
2) If the app was pulled by Apple, but remains functional, and the developer didn't do anything wrong, do you want to penalize them when you still have a working app?
If Apple pulls an app, they should issue and pay for the refunds themselves, not the developer.