What I don't want is malicious apps on my phone.
They determined that the sole purpose of the app was something other than what it said. I'm glad that Google had the balls to remove it automatically.
For those that want this app still, there is nothing to stop you installing it manually, where it will be beyond the power of Google to remove.
Look at it this way. Let's say that someone published a report saying that Google KNEW that 50000 people had malware on their phone, and chose not to remove it despite having the power to do so. This would make a lot of users very unhappy. Google's Market represents a middle ground between no control (which is still available through manual installs) and unfair over-the-top restrictions (such as on the iPhone).
It is in Google's best interest to use this power responsibly. For that reason, it is not unreasonable to trust them with it - for now.