To be clear, the Twitter app on Facebook still works -- it just works basically as it did before. That is, allowing you to post tweets to your Facebook Wall (for both your profiles and pages) and to sync your profile photo.
For the five minutes the friend look-up feature was alive, it was actually a very useful way to find Facebook friends also on Twitter and follow them with one click (though they had to have the Twitter app installed for you to be able to find them). And my understanding is that Twitter was using the Facebook API the same way that any other third-party app might. So the only conclusion I can draw is that Facebook didn't like Twitter building their social graph on top of their own.
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