Google blocked it because Microsoft added in a feature that would skip the ads that play before vidoes. This broke Google's TOS, so Google revoked Microsoft's key.
I think Maps was still usable through the browser unlike YouTube. And I don't think there was ever an official Maps app. At the time Microsoft's own maps were about as good...or rather Maps was often equally bad in equally surprising ways.
It had been serving it the WP7 app until Google started blocking it. At the same time Google blocked the WP7 browser on YouTube. There was nothing technical. Google was still serving up YouTube videos to iPhones.