Apple disabling iOS 5 devices who purchased UDIDs from other devs.
Looks like Apple has identified those developers who sold their slots for UDIDs. Many of my developer friends have reported that Apple has sent an email warning which said that they have identified the developer to be selling his slots for some users to get early preview of iOS.
And Apple has started closing the developer accounts for selling the slots and also, have flagged the UDIDs associated with that dev account, thus making the iOS 5 device unusable.

Many developers have received this letter and immediately banned their account from the developer’s program.
Once Apple locks your iOS device, the phone will enter the initial setup mode asking you to connect to a WiFi network. And nothing happens more than that.
Solution?
The only way to keep using your iPhone is to downgrade your iOS 5 device to 4.3. I’ve posted a guide here to downgrade your iOS 5 device. So get going and downgrade your iOS 5 device quickly to escape this ban from Apple.
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