The good news here: Blizzard may be planning to do more with the iPhone. The bad news: they're apparently trying to squelch useful iPhone apps that are out there right now. They've already sent out cease-and-desist orders to two Warcraft-related iPhone apps that were charging money (Armory Browser and the Warcraft Arena Calculator), and now we've heard from its creator that Warcraft Characters has gotten the C&D treatment as well (here's his post on the subject, though his site appears to be down at the moment). Just before he was set to announce the alpha of the 3.0 version of the app, Blizzard dropped him legal notice to stop distrbution. As of this writing, however, the app is still on the App Store, so get it while you can. Warcraft Chest and WoWTalent appear to still be available on the store as well, and WoWTalent is still charging 99 cents.
For whatever reason, it appears Blizzard is going after even free programs released on the iPhone that use their information from the Armory. We're not quite sure why -- an optimist might guess that they're planning to release an Armory app of their own on the iPhone, or they're worried that people might confuse the official iPhone app with one that's unofficial. Or maybe they're just being cautious of their copyrights, though that's a pretty harsh assessment -- there are other MMOs who surivive and thrive off of unofficial iPhone and desktop apps.
It would be a real shame if Blizzard legal was simply going after fans who have invested a lot of time and effort into these apps even when there's no clear reason for them to do so. Clearing the field for an official app is one thing, but closing down a useful product for your players built solely by your fans just to erase a perceived threat is entirely another.