Design doesn't always need to make complete sense, sometimes it just needs to wow people beyond their own logic. I don't recall ever thinking fan blades were such a huge design flaw that they needed to be taken off immediately, but apparently someone thinks it's a bit of a eye sore.
Some of the fans once the blades retract it just looks like a plain overhead light. I keep staring up at the ceiling fan above my head and no matter how hard I look at it I can't force myself to think it's such a hideous thing that it should be hidden.
Each fan varies in price according to model and how the blades retract. The base Air Shadow is priced at $499.95 but with extra lighting kits added the price reaches $899.95.
Air Shadow ceiling fan hides its blades when not in use [via bornrich]