There was a lot of hue and cry when Apple's mysterious kill switch was revealed that could kill any application remotely on an iPhone 3G. It seems Google has also taken the inspiration and integrated the same kill switch in Android. Google, however, mentions it in Android Market's terms of service.
"Google may discover a product that violates the developer distribution agreement ... in such an instance, Google retains the right to remotely remove those applications from your device at its sole discretion."
Google's kill switch seems to be justified because the Android market is unmoderated and this is the only way to control flooding of bogus apps. Google also goes a step further in the 'kill app' process by trying to recover the amount from the original developer and return it to the buyer.