The issue with that is that apps are sand boxed, they don't have free run of the iPhone and every other app. One app killing an iPhone is unlikely. In that event you are only a restore or reset away from being fixed.
If Snow Leopard turns out to have some fatal flaws or bugs I very much doubt Apple is going to wait a month to fix them. A day maybe 2 tops will go by before something is out that at least helps and maybe another day or 2 for a full fix. Why can't the iPhone get fixes that fast for apps?
I look at it this way. There has to be some personal responsibility. The internet is full of bad stuff; malicious sites, viruses, trojans, worms, you name it. But in the end in 99% of cases your computer doesn't just get a virus, action from the user is required. Maybe they got tricked to going to a fake website or got a bad email. At some point the user did something to activate the code to exploit a hole.
Right now the way things are Apple is supposed to be reviewing these apps. Yet why do I download so many that have performance issues, bugs, and crash all the time? Right now 100% of the blame IS Apple's, they are supposed to be "protecting" me from these bad apps. They have failed badly at that, it's a joke. I've gotten some even from big name developers that I couldn't even use because they crashed or were full of sloppy performance. Where was Apple on those? They clearly are not reviewing apps for bugs because there is literal trash in the app store right now full of bugs and glitches. When a bug does get in a developer will know probably within hours with thousands of downloads and can get to work and put up a fix within another mere hours instead of weeks. People have been dealing with bugs for decades now, I don't think they are that big a deal until something you use all day every day is crippled for weeks waiting to be "reviewed".
If you take out the "review" it gets Apple out of that responsibility. They can put in the TOS, download apps from trusted sources or at your own risk. They already warn me about apps that "may be potentially offensive", eliminating them from responsibility if someone is offended. The Windows UAC is similar, no matter how annoying, for non-power users it can make them think an extra second if they really should be doing what they are about to do.
With no review it's on the owner to download and manage THEIR iPhone. Everyone goes on and on about how they paid for it so they should be able to do what they want with it. Jailbreakers don't blame Apple for bad apps, they know the risks. If the app store is the only front for apps it will be pretty easy to spot something that may be shady. If something bad gets in it won't take long to kill and the reviews will tell others, and the app will go away. The ecosystem will police itself. Useless and bad apps will have less incentive to even enter the app store because people will know they are on their own and won't download something they don't understand.