“ The real culprit behind the lack of Android apps isn’t lack of developer adoption or a difficult SDK – it’s the ludicrous 256MB limit on app storage for most current Android phones and Android 2.0 itself. The OS also does not support the installation of apps on removable storage like SD cards, further ruining chances for more effusive and expansive titles. Considering most apps are in the 10MB range we’re talking a max of 25 apps on a good day and about 5 on a bad one.”
Source: mobilecrunch.com