Unfortunately, there are always people who make it hard for everyone else. I have a suspicion that the guy in question got his 03 FFL just so he could supply his drug buddies with guns, but of course I can't prove that. In a lot of places, the CLEO signature would be no problem and any way, the CLEO doesn't say the applicant is a nice guy, only that there is no law against him having the license.
For a long time, the anti gun gang has been trying to eliminate the C&R license and I have no doubt they will try again now that a gun-hating president will be in the White House. (Make no mistake, Obama hates guns and gun owners with a passion, no matter how many lies he tells.)