Jon, I totally get your frustration. I haven't actually noticed this yet, but I do occasionally need telnet and I'm sure I would have realized this in some situation where I needed it for some kind of urgent troubleshooting, maybe without an internet connection, and I'm sure my initial reaction would have been the same as yours.
However, given that it's pretty easy to install tools to handle those functions, and how many people could be exposing themselves to inadvertent harm using insecure tools like telnet and ftp, I get why they would do it.
I have been trying to remove or update anything that I interact with on a regular basis that doesn't offer SSH or another secure protocol for communication to try and mitigate the potential hacking risk on the networks I manage. Seeing everything that does get hacked these days, it's important. And it's not really Apple that is to blame, it's all the people with bad intentions.
For what's it's worth, I've been telling people for years not to use Yahoo because all their accounts were hacked. I've gotten so many spam and phishing emails from people I know with Yahoo accounts, and many multiple times after they updated passwords etc., that I've assumed for years someone or multiple someones were living inside their network some how. I don't think anyone I tried to get off yahoo actually did though. They would just change the password and get hacked again later.
One person I know had to go through and change passwords on every account they own after multiple accounts were compromised through their emails.
Security is very important, so I think Apple is doing the right thing, and we should take the hint and try to follow suit.
Thanks for posting though. Going to install telnet right now.