Not Evil, but certainly brain-dead stupid. I just watched the Eucalyptus Video (http://th.ingsmadeoutofotherthin.gs/eucalyptus/) and -- judging from that -- Eucalyptus an absolutely stellar example of software craftsmanship.
I'll admit that, originally, I was in favor of the strict review process. I expected it to be used to keep out crap (like farting apps) that delegitimize the platform, while showcasing apps like Things, Tweetie, Flight Control and Eucalyptus. Basically re-create the kind of indie dev culture we see on the Mac.
Instead, they've become Victorian-era censors, discouraging real development on the platform, and wracking up dumb controversies. Especially considering Apple's market, hardly the most socially conservative group, it makes almost no sense.