This removes their duality of being a media / service play. This is highly beneficial to Twitter itself as well as to a new service/platform aiming to be a pure microblogging piping service. The only loser here are the Twitter app developers and startups which are faced with a now limited channel to promote their apps.
A large amount of users rely solely on a dedicated third party client. If those apps lose the ability to provide the same reliable service, then Twitter (as a platform) will also be affected.
It will coerce/force a % of users to use the 1st party apps. It will also allow them to focus on media platform features without the distraction of pleasing 3rd party devs (at the moment). I am pretty sure they will improve that side AFTER they have finished being a destination platform.