Displaying Picasa HD Lite in front of Web Albums does no good to anybody. And frankly if the developers have to do SEO because the freaking title is more important than rank+description, than the search function is definitely broken.
The example here was searching on the search term "picasa" and the search algorithm returning two applications that have that search term in their name ahead of applications that do not.
It's certainly possible that Web Albums is better than Picasa HD Lite, but c'mon. If you do a search for "photoshop" you will find competitors to Photoshop Express with higher ratings, but Photoshop Express still shows up ahead of them in the search results. Even more shockingly, when you search on the word "twitter," the official Twitter app shows up ahead of Tweetbot, and you won't believe what comes up when you search for "angry birds!"
Maybe this means the App Store is broken, or -- going out on a limb here -- it means that it's prioritizing titles that actually contain your search term over titles that don't. Maybe you think it's just completely insane that titles take priority over keywords and description text, but -- again, maybe this is just my crazy crazy way of looking at the world -- I kind of see the logic there.
If Google Search worked like this, I wouldn't be using it. The title is definitely important, however on Google the title is less important than everything else combined, and that's how it should be.
Also, from your examples all the apps you mention are above 4 stars and have massive downloads. TweetDeck may be better than Twitter, but the official Twitter is not too shabby either.
Also I'm sick and tired about apps with title-SEO. Twitter is a known brand, however if Twitter were to be launched today as an iOS app it would be called "Short-message your friends" or some crap like that.
Google have a heck of a lot more data to go on. It's not just the title of Facebook.com, it's the millions of links to it that contain the word 'Facebook'.
The app store doesn't have that data, so has to rely more on titles to try and how you a specific app if you do a specific search. If I search for 'Facebook' there's a high chance I want the official app, so it should come up high no matter if it's not the highest ranked.
Of course, it's plainly open for abuse. I wonder if they do, or could, take usage stats into account as well as ratings. If everyone is using the official Facebook app despite the fact it's crap, the user is probably trying to find it when they search for it, but it no one is using My Crappy Picassa App then it shouldn't be ranked very highly, even on a search for 'Picassa'. But then you have the bootstrapping problem of new apps being hard to find, even with exact searches. Perhaps some sort of inverse relationship between age and active users would work.
Well actually, they should have more data. The description and reviews should be available to them without an issue. More importantly, they could mine backlinks for more context.