All batteries degrade over time.
This is a gross oversimplication that doesn't actually address the problem people have had with the battery.
The throttling issue wasn't implemented because of normal degradation. It was put in place because of a battery design issue in which the iPhones themselves attempted to draw more power from the battery than the battery allowed for, causing a shutdown.
the Throttling solution is a decent work around to the problem. But it's just a work around. Apple needed to be upfront and honest about it, which is the biggest gripe. Apple was NOT up front and honest. They got caught lying about it, after many people were either forced to pay for repairs out of pocket to 3rd party repair places (Apple refused to aknowledge this as a battery issue and refused repairs), or being told ot buy an upgraded newer device.
it wasn't until they were outright called to the carpet by numerous publications did Apple finally admit that they did in fact throttle devices.
as for battery degradation: there are two places batteries degrade. Apple's testing only accounts for 1 of those two methods. The phone shutdowns that led to the throttling was not a test Apple conducted. Historically, in virtually every single device (including most of Apple's others as well), the battery's capable load is more than enough to handle 2-5 years of this sort of degradation easily. However in the affecteed devices, margins of error were made so low that they started hitting this form of degradation behavior within 1 year. That's a design flaw.
CAR Analogy time:
Think of a phone battery like the Gas Tank + Fuel Pump combination in your car. Phone batteries perform both of these behaviours for electronics. They provide both the reserve power (gas tank) and flow of energy (Gas Pump) to the engine (CPU). When you press the gas pedal (or launch a program), the energy stored in the reserves (Gas Tank) needs to get moved from the reserve to the engine. This is what is flawed in the affected devices. So While Apple only tests how much fuel reserve the battery can hold, they didn't test for how well the pump is working to move energy to the engine. They ultimately provided a fuel pump that was inadequate for the engine with only 1 years worth of use.
Imagine if you bought a car that did that?