This is a good thing. People who give up at first rejection and go out in the press to slam apple aren't commited enough to their apps. All they see is money and often they play on the apple brand and icons to make their app seem more official then actually develop their own art and brand.

There is no mass exodus of developers. Alot of them have no trouble at all with submitting apps. Also thank god for the review process or we would have had an appstore flooded with 500000 apps about nothing right now. Thank god that apple has removed app spammers who just put up different versions of the same app or apps making a funny sound when you press 1 button and nothing more.