You might find the genius lists go some of the way toward solving this problem for you. They try show things you're likely to be interested in, and don't show stuff you already own.
"Try" being the keyword there. Despite my very clear patterns of app consumption (action & puzzle games), Genius keeps suggesting me different podcast apps because I bought one 2 years ago (hint: nobody needs more than one). It has proven completely useless.
This seems a problem Amazon has as well. Because I bought an extra power adapter for my tablet, the My Amazon list is now full of various power adapters...
I am really unfamiliar with iOS but it blows my mind that this doesn't exist already. It seems like a no-brainer for a feature, especially since Apple basically invented the modern mobile app store.
I'm wary of this. Would like it as an option, but I don't necessarily want my app to change between uses, especially if it's something I need to use quickly. Loading up something with a changed UI, or data changes that need to happen, or whatever, when I wasn't expecting it.... won't make me a happy camper. A notification and ability to trigger the update from in the app would be nice, and having the option of 'auto update' would be nice too. I just don't necessarily want it to be the default with no option to opt out.
I think that as developers, we'll need to be very careful to update things incrementally to not jar users. But overall, it should be a win in that just like with a website, the user is always using the latest code. No need to maintain several old versions of web service APIs, which should have a good effect on reducing bugs.