The prepare3D sites states:
Doesn't that mean developers need $499 retail licence to distribute their products?
That only applies to those who are selling a complete "solution" that includes the end user copy of Prepar3D with it.
It most definitely does
not apply to scenery, aircraft or custom gauges that're intended to be used by someone who already has a Prepar3D licensed installation on which to run the developer's product...
-or-
...if the "developer" makes one of his machines available for public use.
For example, I create a really sophisticated aircraft and wish to display it at Airventure 2012 (Oshkosh) with the goal of selling DVD copies of my product with or without a copy of Prepar3D as part of the package. In that case, every machine I took to the show would have to have a full-version $499 license paid for. I could not legally use my $10/mo developer's license for such a venue.
As another example, suppose I set up a booth at the Lake County State Fair this year and simply allowed anyone to "try it out" for free or for a fee. Those systems would likewise have to have the $499 license for each machine.
Note carefully that I'm not speculating about what "might be," but simply stating what L-M themselves have stated is the true case. There have been many such discussions at L-M's developer's forums about these very questions.