AppHub is not trying to circumvent the Apple release process, rather, we want to make distributing updates as frictionless as possible. The main advantages we give developers are instant updates and staged rollouts (deploying new features to a percentage of users).
Glad you pointed out Section 3.3.3 of the Developer Agreement. From our understanding, it is intended to prevent developers from trying to avoid the App Store fees. As always, it will be up to developers to follow Apple's guidelines in their iOS apps.
You still have to go through the initial App Store Release process initially. After that, using this framework you can push updates directly, rather than waiting the requisite 5 business days[1]. As an app developer, being able to push updates (read: bug fixes) immediately is a blessing--we live and die by our reviews, and a bad update can cause an avalanche of negative reviews. Waiting 5 days[2] for a fix to go live can seem like an eternity.
1. It was 5 business days when I was an IOS Developer in 2012.
2. For all updates it was 5 business days. There were rumors that if you had a evangelist at Apple you were on real good terms with, they could fast track the update for you, if it was a rare occurrence.
If Apple wanted that they would just give developers the ability to update without review [or a question when submitting a new binary "Have you made significant updates that changes the functionality of your app and or features to the app you are submitting? Yes/No". They don't even let you distribute public beta through their system without the app being reviewed first because they want complete content control over the software distributed on their devices.
Glad you pointed out Section 3.3.3 of the Developer Agreement. From our understanding, it is intended to prevent developers from trying to avoid the App Store fees. As always, it will be up to developers to follow Apple's guidelines in their iOS apps.