This will, however, lower the number of 1 off apps that people need. Sometimes, I need an app to do something that I do once a year. I have no intention of paying $5 for this app and chances are, I'll download it and return it clean within that 7 day period. So if your app is very situational, the MS app store might do more harm than good.
It wasn't clear on the initial page, but I found a better description of the various options [1] and time/feature limited apps are just an option - you can opt to collect the money upfront.
Yeah, I can see that happening. Looking through my purchase history on my Mac and iPad - there are a handful of apps that I've purchased for one specific use, or are only useful for a limited time (ie, a fantasy football draft application). In all cases, I feel like I got my $1 worth, but if the feeling is "eh, I'm not going to use this anymore", there isn't any incentive to go through the process of paying for it.
Depending on how this is implemented and whether or not it is optional, it could be problematic for some useful apps.
These kind of apps tend to be free though. There might be paid version available but for most a cheaper and usable version is either already there or would soon replace the paid version for most users.
