Claiming a breach the Developer Distribution Agreement, Google has pulled a gaggle of Android apps from the App Marketplace, all of which allowed you to tether your G1 and PC together.
Seth Lemons, the developer of Wifi Tether for Root Users, was one such victim of the purge. As Lemons posts on his blog, he apparently ran afoul of both Developer Distribution Agreement ("Google enters into distribution agreements with device manufacturers
and Authorized Carriers to place the Market software client application
for the Market on Devices. These distribution agreements may require
the involuntary removal of Products in violation of the Device
manufacturer‚Äôs or Authorized Carrier‚Äôs terms of service") and T-Mobile's Terms of Service ("Your Data Plan is intended for Web browsing, messaging, and similar
activities on your device and not on any other equipment. Unless
explicitly permitted by your Data Plan, other uses, including for
example, tethering your device to a personal computer or other
hardware, are not permitted").
(You should read the entire blog entry; Lemons makes a convincing case as to how this flies in the face of the whole "open architecture" aspect of Android.)
T-Mobile's stance is that the G1, despite it's open-source OS, is being subsidized by them to get users to subscribe — therefore, they have every right in the world to lock the phone to their network and not allow any user mods that will jeopardize their revenue stream. Never mind that those who really want to tether their G1's will find a way to do just that, by fair means or foul.
Of course, this all begs the question of why all those tethering apps wound up in the Marketplace, and what impact Android will face by going back on its whole "carrier-independent" philosophy.
And you thought the App Store's tactics bordered on the fascistic…