I agree, I think opening the platform up to app developers added value faster than Facebook could have added it themselves and increased their user base. With the network advantage Facebook now has it's likely that if they cull all of those apps they won't shed too much of their user base.

I think that early on that API was definitely making them more money, but the balance has shifted. I suspect they kept the API around as long as they did to avoid a sudden PR disaster when they removed it (like twitter). The congressional hearing and all the recent news has served to lessen that cost and may actually end up being a boon for them.