I agree there's an over abundance of app developers. I wonder if the costs to Apple in terms of hosting all the free apps, paying reviewers, dealing with refunds and dealing with rejection appeals just isn't worth it?

However in a way the review process is broken for customers. Say I have a free app with 100 reviews and a 5-star average. The app has been downloaded on average 90 times per day for a year and the monthly average has been slowly growing (except for the initial release spike). Also the analytics show retention and daily usage going up. IMO it's safe to say that users like this app. Therefore users suffer when an update to the app is rejected or the app is pulled for superfluous reasons.

I would suggest if the example app with 100 reviews and ninety downloads a day was rejected, users would just buy a similar app.

Users are happy, ignorate that another app that may have been better was rejected. Apple is happy because revenue is revenue. Only the developer of the rejected app is not.