@jameshoty - I have the same problem. I have had it since updating an iPhone 5S to iOS 8 when it came out. It also affects an iPad Air 2, iPhone 6, and a couple of other iPads in our household. Some of those devices started having this problem under iOS7. I had this problem before upgrading to Yosemite.
There are other threads here about this problem but nothing seems to fix it. Rebooting, resetting, restoring from backup, setting up as a new device, etc. - nothing has fixed it for me. I submitted a bug report to Apple but never heard anything.
For others on this thread who may not understand exactly what we're talking about, this is what happens:
1. App updates are downloaded on iTunes on my Mac (running Yosemite).
2. Device syncs to iTunes and apps seem to be updated on the device.
3. The notification badge for the App Store on the device still shows that updates are needed. But, as you can see in jameshoty's screenshot above, the apps that should have been updated are listed under Available Updates. The button next to them, however, says "open," not "update." If you tap it, the app opens. There is no option to update it again.
Some other aspects of this:
-It doesn't happen if you update apps by downloading directly to the device, only when syncing updates from iTunes.
-When another app needs an update, the ones that were listed as needing updates will disappear from "Available Updates," but the new app or apps will exhibit the same problem.
-If you remove an app and reinstall it from iTunes or by downloading, that app will no longer be listed as needing an update. If you do that for all apps that need updates, the badge goes away. But it always comes back again as soon as another app needs an update.
-Turning on automatic updates will "fix" it once a new app is updated, but if you turn off automatic updates the problem recurs. Since automatic updates is another method of directly downloading updates, that is not surprising.
-The apps themselves are actually updated during the iTunes sync. This is a problem with the notification of needing an update rather than with the actual update. Possibly this is a problem with iTunes communicating with the device that the apps are updated.
I don't know if this is happening with everyone and people just don't notice or care or usually download updates OTA. I prefer not to update that way because some of the apps are large and have to go to several devices. I find it very annoying. I finally just turned off the notification badge. I think it's a problem with iTunes. It started around the time iOS8 was released but there was a new iTunes at that time as well.
