I agree. The lack of distinction between Demo and IAP apps manages to hurt apps with demos, free apps and users. I really fail to see Apple's angle on this. Maybe they're trying to educate customers to accept IAPs.
If anything, I'd expect Apple to favor "fairly priced" apps you pay for upfront as was mostly the norm at the beginning.
The situation is probably more that free-to-play in various degrees of obnoxiousness that don't require an initial purchase to use the app--possibly with a separate demo version--is mostly what consumers expect these days.
