Matt Neuburg at TidBITS and Keith Harrison at the Use Your Loaf blog recently discussed the history and working of Automatic Termination. The Apple brain-trust decided to migrate this feature of iOS to OS X Lion and now Mountain Lion. Neuburg says that Lion is "a quitter."
What is happening is that the system (on the Mac this is the Finder) decides when an application needs to run and will terminate it on the fly and reclaim its resources.
Harrison writes that Xcode has decided to opt-in Automatic Termination for OS X apps.
This is a familiar situation for an iOS application. Apple has always made it clear that inactive iOS applications can expect to be terminated and should be designed with that in mind. The iOS task switcher also does a good job of hiding which applications are actually running so in theory a user may never know when switching between applications. In practise it is not always totally invisible to the user but it seems to be a reasonable compromise on an iOS device.
Automatic termination of applications on a desktop class machine seems to be a much less reasonable compromise. OS X has access to much greater resources and it seems unnecessary to start terminating applications without user intervention. Even worse is the fact that the application disappears from both the dock (unless you opted to keep it there permanently) and from the application switcher forcing you to relaunch it.
As both Neuburg and Harrison suggest, Automatic Termination is a very bad feature on OS X applications, even for machines with limited RAM and a SSD that might be running low on capacity. There's no good reason for this behavior.
Both posts have a terminal command to turn off the feature. Neuburg points out that TinkerTool 4.9 (released on July 25) has a checkbox for this setting.