Yes, there is more to it than you're aware of. For starters, how do you think Twitter's API customers would monetize <i>their</i> applications? They would be paying Twitter for the privilege of attempting to monetize tweets. It only makes sense to pay if they can extract more value than Twitter can.<p>If someone finds a way to monetize tweets that's more effective than Twitter's, then Twitter would have an incentive to copy it, therefore competing with its customers.<p>Long story short, that's the reason Google stopped selling white label search via its api to customers like Yahoo ten years ago.
All these articles claiming Twitter is restricting developers using their API are all missing one important distinction: Twitter is only restricting Twitter client developers. There are hosts of other developers who are using the Twitter API with no restrictions, those building value add services in Social CRM (social media monitoring, analytics, data reselling, sentiment analysis, etc). Yes, Twitter's new ecosystem is geared towards the B2B market. But to say they're restricting developers across the board just isn't true. However, it seems most of the tech blogs tend to think only of consumer-facing client apps as the members of the Twitter ecosystem, and so forget about all the other apps out there, the ones they're not restricting.
As I understand it, Twitter already makes plenty of money off of their data. Many companies are interested in getting access to more data than what's available for free, and they pay for it. Check out DataSift and Gnip: they are resellers of various social media data.
<i>Each has its own merits in the context of sports competitiveness, but in Twitter's case there is no reason for a hard cap at all. What does Twitter gain by putting a hard limit on API usage?</i><p>There <i>is</i> a reason for a hard cap: the limit's goal is to ensure twitter-owned clients dominate the market for basic twitter use.<p>You may have a point by saying that twitter can simply make the tax per additional tweet equal to the approximate revenue they plan to lose as a result. But that figure may be hard to calculate, especially its long-term value. So even if a company is willing to pay 5x to twitter per additional tweet over the hard limit, twitter doesn't know the long-term impact of it