The approach is certainly interesting and it helps some developers get the word out for their apps, or perhaps convince you enough to switch to the paid version or the app…..but at what cost? Obviously, your time which is most valuable, but what about your iTunes collection that will be littered with these other free apps? Not to mention that as soon as word gets out more, there will be some malicious free apps that somehow make it through and abuse your phone and your data in some way.
It is not breaking any AppStore rules that I am aware of, so Apple has no reason to pull it until it makes bad news.
Have you tried it? what are your thoughts?