@monkey_4150: If you weren't sure whether this scenario was against the Terms of Use, why did you offer the legal advice to your friend it was against the Terms of Use?
The relevant Terms of Use appear to be found here: http://www.apple.com/legal/itunes/us/terms.html#APPS In pertinent part, the Terms read as follows (emphasis supplied):
APP STORE PRODUCT USAGE RULES
ℹ If you are an individual acting in your personal capacity, you may download and sync an App Store Product for personal, noncommercial use on any iOS Device you own or control.
(ii) If you are a commercial enterprise or educational institution, you may download and sync an App Store Product for use by either (a) a single individual on one or more iOS Devices used by that individual that you own or control or (b) multiple individuals, on a single shared iOS Device you own or control. For example, a single employee may use an App Store Product on both the employee's iPhone and iPad, or multiple students may serially use an App Store Product on a single iPad located at a resource center or library. For the sake of clarity, each iOS Device used serially by multiple users requires a separate license.
(iii) You shall be able to store App Store Products from up to five different Accounts at a time on a compatible iOS Device.
(iv) You shall be able to manually sync App Store Products from at least one iTunes-authorized device to iOS Devices that have manual sync mode, provided that the App Store Product is associated with an Account on the primary iTunes-authorized device, where the primary iTunes-authorized device is the one that was first synced with the iOS Device or the one that you subsequently designate as primary using the iTunes application.
Arguably, the Terms quoted above (especially those related to commercial or educational entities) imply that a person may use her access to the App Store under her Apple ID only for her own use of the app(s) in question. This is only an implication, however, and your friends are presumably neither commercial entities nor educational entities.
Therefore, the question would seem to turn on the meaning of the words "personal" and "control." Is Friend B's personal use of Minecraft on her iPad sufficiently "personal" use to constitute the "personal, noncommercial use" described in clause (i)? Does Friend A sufficiently "control" Friend B's iPad to fulfill the requirement that the use of his Apple ID-purchased copy of Minecraft is used on an iPad that she "own[s] or control[s]"? Note that Friend A need not own Friend B's iPad—the fact that mere "control" is also a sufficient circumstance indicates that Friend B may own her own iPad.
As I responded to Dah•veed, in essence, Apple allows the use under one Apple ID of apps on multiple devices. Clause (iii) specifically allows the inverse: the use (well, at least, "storage") of apps from multiple Apple IDs on one device. This clause says nothing about the multiple Apple IDs all belonging to the owner, controller, or user of that iPad. It seems to me, then, that you might be allowed, for example, to put Documents to Go on your iPad and the iPads of your two smartest friends, so that they could receive and provide you with edits on a novel you are writing in MS Word format. How does the Minecraft scenario differ? What if the Minecraft transfer were to allow Friend B to learn Minecraft so as to instruct Friend A how to better play the game?