They can remove things, that is the point. Today something bad is malicious software. Tomorrow it will perhaps be depiction of two men kissing or political satire as seen on the iphone, who knows ?
The Android Market has a list of content that is not allowed, including an ambiguous "any material not suitable for persons under 18". And since applications are not individually screened for content, we will see a number of them revoked via this mechanism.
However, note that, unlike the iPhone, Android allows you to install apps from other sources besides the App Market -- sources which are not limited by Google's content policy.
> These applications intentionally misrepresented their purpose in order to encourage user downloads, but they were not designed to be used maliciously, and did not have permission to access private data — or system resources beyond permission.INTERNET.
I can read good sir, but I wasn't talking about that. I do think the application they removed was pretty useless (the experiment it was designed for seemed to be over). What they said is that they removed it in order to test their system, which, according to them, will be used to remove malicious software.
So what's labeled at bad is malicious software. And if I am wrong and the experiment wasn't over, then it just makes my point as it is already (in some meanings of the term) abusive :)