As a developer and a consumer, I think that this system should work well in theory. My biggest gripe with fully open source is that for every top notch program there are hundreds that are a complete disgrace.
My friends and I often talk about the pros and cons of the various smart phone platforms. Two have android devices, two have apple devices, and I have a WinMo device. The android users are on their five phone combined, the apple users are on their forth combined, and I'm still on my original phone I imported. The apple users are still jealous that I pay only $20 a month through ATT and can tether (as I'm doing now to type this), and one of the android users is finally able to do it as of a month ago. This is all, of course, beyond the scope of this thread.
Apple's app store is really nice. It's very developed and has a ton of nifty programs that generally don't cost very much. The cost of developing for the Apple platform is pretty expensive though, along with a waiver of naturally assumed rights. The android store reminds me a lot of your typical linux software repository full of a TON of programs, most of which are amateurish, buggy or completely redundant; but it's making progress, which is really nice to see. Finding applications for WinMo has gotten easier over the last couple of years with major publishers offering software from a variety of developers.
A $100 subscription is a very small price to pay, one that most developers who create decent software wouldn't mind either. It hinders those that want to create something amateurish and then not provide any support later down the road.
I'm exhausted right now so maybe what I'm saying is very coherent. Let me leave you with this. Aside from the obvious in hardware capability, there are a ton more developers for Wii and DS than PS3, PSP, and X360. Though there are a few gems that made it to Wii and DS, most people consider the games for these platforms to be crap. The cost of developing for Wii and DS is abysmal compared to developing for Sony and Microsoft's platforms, and that's not even taking into account the royalties.
Developing a title that you know will fail, will in fact cost you. Is this a good thing or a bad thing? I think it's a good thing because how often do we look at software and question why it even exists in the first place?