Apple is now taking steps to end App Store name squatting. This issue was talked about last October, when a developer learned someone had secured the rights for the name he wanted to use for his app in iTunes Connect, but hadn't actually made an app to go along with it.
Apple has now begun emailing developers if they've failed to upload their binary for 90 days after first starting the app creation process. Apple warns the developer that they have another 30 days to do so, or the record will be deleted from iTunes Connect. And the key point: "The app name will then be available for another developer to use."
Now, name squatting wasn't without a barrier to entry before — you still needed to pay the $99 yearly fee to be an official developer. But that $99 ensured you could basically squat on as many names as you wanted (though Apple would take back names that were proven to be trademarked).