The problem lies in the phone's full software permissions. Consumer Android phones download paid content to a private, hidden apps folder, inaccessible to the user. Thing is, as is stands, this normally inaccessible folder is accessible on the dev phones. Not only does this let people flat out copy and redistribute apps—it enables a sort of app laundering scam, in which someone buys an app, copies it to another location, and gets a refund for the app (as per the Marketplace's 24-hour return policy), only to reinstall the copied version later.
Right, so Google sort of screwed up on that one. But the consequences will be felt most by the poor saps with the Developer G1s, and even though many of them weren't ever intended to use a dev model, it's a shame. Think about it: the non-developers who paid $400 plus a $25 developer fee just to get their hands on an unlocked G1 are (or, really, were) probably the most loyal devotees that Android has—and now, if they want paid apps, they pretty much have to pirate them. [Macworld]