3 separate things here:
Perhaps, however it doesn't change the fact that the functionality of these bikes is severely compromised by software issues,
Because the controllers necessarily have embedded software then yes functionality can be compromised by issues in that software. Of course all the luddites piled in but in the OP's case the bike was actually both rideable AND the assist was still working! The only issue was they couldn't use the display and would probably use more battery by being in the highest assist mode all the time. They could still have gone for the ride though. And it turned out it was a faulty component anyway not a software update.
and on top of all the fun related to the ongoing availability of components,
I'll give you this, but the underlying issue is the lack of standards and the fact that manufacturers can keep component interfaces proprietary. In an ideal world the protocols should be open source and either standard connectors mandated or the ability to swap out for commodity components, not be coded to only accept manufacturers' components. I see the EU have included bicycles and e-bikes in their right to repair scope, but since we in the UK "tuk are cuntry bak" it doesn't look like we'll get it here any time soon.
also begs the question of what happens when the app's are no longer available / supported..?
Well, as long as the bike doesn't need an app to actually function (which, I agree is shocking) then a no longer supported app would just mean you can't access some of the value add features any more. On mine, it's stuff like a GPS track function, ability to tweak assist levels and to see more data like the number of charge cycles. So not the end of the world.
In general this stuff is a valid concern, but one with wider ramifications than e-bikes. I'll never buy an internet-enabled freezer for instance!
As always we see the faulty bikes because people post them either asking for help or just to rant, but we don't see much about the majority that just work.