When the only market available for you to distribute your app gets saturated by zillions of other apps with similar characteristics and similar ratings, the expected RoI on the development of an app is reduced. This, in turn, leads to a decreased investment by the developers and, thus, to a high number of lower quality apps fueled by the new entrants in the market.
That argument doesn't hold water. The web is a completely open platform with zillions of websites "with similar characteristics". And sure there are crappy ones, but there are tons of great ones too.
Of course, now you're begging the question: if there are already zillions of apps in the store and you're not providing anything they don't, does the world need you to develop it?
On the other hand, if the market does get flooded with low-quality apps, it should be pretty easy for developers to make money by simply making good apps.
