The point is, Apple should feel secure that their product is the absolute best.
The fact that they're removing any other product from their store that might compete says quite a lot about their confidence in their new product.
This is circular logic. If Apple thinks its product is the absolute best, then why carry inferior products?
Competition is not the point. The point is to sell as many high-margin Apple products as possible. Before they didn't have any products in that category, so they stocked the best products they could find. They did this to support their OWN products so people could find other devices that worked with their iDevices. Now they have something in that category, so they're stocking their own, higher margin product. I don't know why this would confuse people.