As Carl said above, and I agree, marketplaces are still viable. We've seen success with our FooPlugins marketplace since we launched last April. Ours is a bit of a hybrid though, including our own plugins alongside our vendors.

Our growth has been slow, but steady in terms of bringing on vendors, The idea wasn't new, and each marketplace has (or had) a unique way of doing things. We saw an opportunity to utilize the same basic marketplace idea, but to offer it in a way that hadn't quite been done yet.

Brad's WP App Store showed us that the community of developers and product providers are open to the idea, but for the reasons he already stated, there were some hurdles that just couldn't be overcome at this time.

Kudos to Brad for sharing the details publicly and for also morphing WP App Store into what we hope will be a viable revenue stream for him.