Again, the effect could be negligible, but Apple has the right to reject something that could hurt their business model, regardless of the magnitude.
No, they don't. At least, not arbitrarily. They cannot, as the iPhone manufacturer, use their own leverage to prohibit apps that might duplicate non-Apple-patented technologies on the iPhone that might compete with Apple's own. They lost the ability to use that argument when they previously allowed calculator and notes apps which obviously duplicate features without question which set a precedent to all apps that followed them. Apple created the expectation that duplication of functionality was allowed, and then selectively revoked it.
Now they just appear to be using their leverage to control competition. It's not hard to see how this would play out in court.