The electrical interface standards may change between devices (voltage/current sink ability) and even between software releases (power saving etc) resulting in a sudden "it stops working" moment.
The basis of it is also flawed on the fact that it's a workaround for a closed platform at which point it's probably better to just use an open one.
Hack yes. Novelty yes. Don't build anything important with it.
As far as it being a hack for a closed platform, I'm not sure why that matters if your goal is to interface with the primary mobile phone platforms. This solution works, and if you need something more professional, working with the dock connector itself isn't an burden any more insurmountable than dealing with injection molding or other product design and manufacturing concerns.
Using the dock connector with a legitimate product requires you to join Apple's "Made for iPhone" program.
For a device like Square that works on multiple platforms, the audio jack is a common interface and the Square reader has the benefit of requiring little (to zero) power to function as it consists of a magnetic head that works when a card slides across it.
It's also useful for student projects. I got one of the original wiretaps when they were giving away their first batch for a prototype medical device (we didn't end up using it in the end because it was still too much work).