Yeah - this article is clearly trying to paint a negative picture of a totally normal situation just for the clicks.
It uses technology that is really clunky. It tries to locate the headphones based on Bluetooth signal. So, a few things.
1) If they're dead, it doesn't work.
2) You're essentially triangulating via signal strength. If this is in a house with a bunch of other electronics, expect it to be an utter disaster.
3) It costs money. Quite a bit for an app.
It's safe to say Apple saw the app as extremely overpriced for the quality and what it claimed to do. It would end up with a lot of refunds, and people more pissed off about the technology than previously.
My guess? Apple is developing a method in house to find them, and it would involve communicating more than just audio from headphones -> phone. It could perhaps even have the headphones reserve a fraction of 1% of their battery life as a signal generating backup to use when lost. They could even go so far as to warn you if you were leaving your headphones behind, and leaving a GPS location of where you left them - even if they were "dead".
The app was pretty underwhelming in terms of functionality, and Apple can develop something far more satisfying in house.