The sad part of this is that Twitter was going in this direction:
http://blog.twitter.com/2010/05/twitter-platform.html
I don't think the reaction would be nearly as bad if Twitter was better at making clients for their own service. They aren't very good at it. Twitter for Mac (née Tweetie) is dying on the vine.
TweetBot is 10x better on iOS than the native client, and Osfoora on the desktop.
Why not meet the challenge of an ecosystem in conjunction with ad revenue rather than just blanket rule against it?