Do they really expect to be able to review all 80,000 + iPhone apps, 10,000+ Android apps, and everything else in every other app store? What are they going to do, attempt to pull every app until each one is reviewed? This sounds like some 60 year old executive finally upgraded his aging Nokia to an iPhone and thought it a good idea.
These apps are digital downloads from (generally) overseas sources, I'm sure there are plenty of programs you can download from the vastness that is the internet that contains content that people would object to. Do they review them? No.
And I know not of Stephen Conroy's involvement in this, but he's already under enough fire from the proposed Internet Filtering Scheme. Give it a rest!