I believe the max size permitted for an individual application is about 2 Gigabytes. This will allow the developers to add much more content if they desire.
I can't imagine that anyone is going to want to sell apps that are anywhere near that size. The largest app I know of is aSleep, which is 172MB. Things may be better with 2.1, but installing/updating the app took forever before. AFAIK, there's no way for developers to deliver apps in a modular fashion, so you don't have to replace anything just to fix one data file.
I've been playing with the iPhone version for a couple of days. It's very impressive that LR was able to get X-plane running, but for now, I view it as a very cool tech demonstration. Among other things, I'd like to see:
1. More than 1 airport, so you can actually go from A to B.
2. Option to turn off the HUD (or at least have a simplified version that doesn't block so much of the view).
3. Since you're not directly moving the control surfaces, the app is a bit more like a game than a flight sim. So how about adding virtual pathways in the sky to guide you to the runway, other destinations, and so on?
4. An ultralight, and maybe an airship.
5. Adjustable control sensitivity.