That "developer" seems very heavy on the FUD. XCode has always been, and continues to be, available for free. Including the brand new 4.0 version. But that said, the 3.x versions have not been deprecated and continue to work perfectly fine.

It is now newly available on the Mac App Store as an alternative download for those that wish to download it that way. It costs $5 to do this. I don't know why it has a price at all. I suppose it's a way for non-developers to download it, but that's besides the point. It's also still available directly from Apple on the web for anyone registered as a developer. Oh, did I remember to mention it's free?

XCode also comes with every new Mac. I suppose XCode 4 isn't on any of the current install media yet though.

The major difference in the state of the distribution of XCode now versus the past boils down to the following I believe:

You used to be able to register as a developer with Apple for free - this had several limitations, but the paid memberships could run $500 to a few thousand dollars per year.

Now it's going to cost you $99 per year to be a registered developer. Not great for the people who used to get by on free, but fantastic for those that used to have to pay without the benefit of support incidents (the premium stuff is still available in multiple Apple Developer Connection tiers as far as I know)

If you don't want to register as a developer it's going to cost you $5 ONE TIME for XCode. That will include all updates, as the Mac App Store doesn't allow charging for them.

Seriously, what's the big deal here? The time to complain was back last year when Apple announced that you couldn't register as a basic developer for free anymore. The $5 XCode thing is rather a convenience for a lot of people.

I don't think you're going to see many people stopping development and closing up shop because they don't want to move to XCode 4 because of the changes over the past year.