If the dev with 1 billion goes crazy and dumps all the coin for quick profit, he may drive the price way too down and kill the coin easily (miners will stop mining the coin if the price like 1 satoshi per coin and at diff 77 it will take quite a long for those who left to find another block/. And since diff retarget is once per 320 block, this will make mining the coin unprofitable for perhaps years). No miners = no transactions and easy 51% attacks, coin dies.

So premined coin is not necessarily unusable, but it is very risky - due to risk of premined coins getting dumped, the coin is in huge risk of price dropping to a mere fraction within a very short time, or even killing the coin. That's what is bad on premined coins. If the coins are more evenly distributes (like if there are perhaps at least dozen or hundred of rich people holding some large amount of coins), the risk of all of them going nuts at once is minimal and if one of them goes nuts, then the impact on the coin is not fatal.