It seems a bit of a meta tag to me.
But I can also see some desire to keep it (I have used it myself!)
I think so. The reasoning is multi-faceted.
The people that follow it either know, or know people that know (I suspect there are about 10 people in that tag with the majority of the answers).
It's a simple way to consolidate programming related questions (we're not SO, we shouldn't have a python, c++, c, etc set of tags).
It's a great way for a tag search to zero in on new questions that should be closed as OT.
It might be called application-development, but what it really is is a tag for ubuntu-the-platform.
It tends to cover the intersection of packaging, programming, and process (like quickly, etc.) It's been tremendously active during the app contest, I think it's one of our best tags, snif.