TFA strongly implies that the App Store was distributing VLC on its own initiative, not at the behest of the author.
Which is bullshit. VLC didn't show up on the App Store by magic, and it's not Apple that put it there. Someone got an iOS Developer License from Apple, agreed to its terms, and then compiled VLC for iOS, and submitted it for distribution in the App Store.
Now, somone–ostensibly a different someone–who has code in VLC has noticed that it's incompatible and is asking Apple to remove it. Apple has no choice, really, the license doesn't allow it to stay in the App Store, so poof. It's gone.
Now try to figure out how this helps anyone. It isn't good for the users, certainly, since an app they could otherwise get is now gone. I don't see how it helps the developers of VLC; an extremely popular distribution channel is now closed to them. And it doesn't help or harm Apple, really, unless someone is really broken up about not being able to get a frankly redundant video player on their device.