I see that behavior for apps that require iOS 7. I'm still on iOS 6 and when going to Purchased -> All there is an Update button for apps that have an update available. When I tap the button the App Store suggests to install the last compatible version of the app.
Ignore the badge
Delete all apps that have updates which require iOS 7
Update your device to iOS 7 so the app-updates will install
The most hassle-free solution is 1.
This message is off topic - it's about the app store badge icon