According to M.I.C Gadget, the trouble started when Apple lifted the 2-per-customer restriction at the Beijing store. People were buying up to 30 iPhones at a time, which they would privately resell for a profit. In fact, many were selling right outside the store. Things got out of hand as the crowd quickly swelled and scuffles broke out between the mass-quantity buyers and individuals looking for a single phone. Security eventually shut the store down.
Within hours, the store re-opened with a new policy. Customers must show ID when making a purchase. They may purchase only 1 iPhone at a time, which will be unboxed and activated in the store by an employee before the customer is allowed to leave. This policy has now been extended to all four of China's Apple Stores.
Considering the high demand and extreme shortage of iPhones in China, it's understandable how a grey market develops. This was an unfortunate circumstance. Good on Apple Store security and management for addressing it in a timely fashion.