There's a few bits of disinformation in here that are starting to get to me.
1) Applications being installed to the SD card is coming. Unless most of the higher ups in #android are wrong (including googlers and JesusFreke,) Google is planning on adding it. Add to that, if you need the extra space, you can move them and use them from the SD card yourself.
2) Backing up your applications and getting them again once you reset your phone is just as easy as it was before. Sure, you may not be able to do it one click like you used to, but you can still back them up, you can still reload them all, you can still redownload them all using the market.
I don't see what the issue is here, aside from (surprise, surprise) their 'copy protection' doesn't do much of anything.