I think "cripples" is a bit dramatic - you can still call, txt, send MMS, email, browse the web, buy & play music, buy & use thousands of apps, watch videos, view maps & use GPS etc. etc. A crippled iPhone is still far better than any previous phone I used.
But I do get what you're saying - jailbreaking (for customising/adding functionality) could be distinct from piracy. Apple has always liked to exert a LOT of control over the products it sells (the original Mac was seen as an appliance with all the apps you'd need); and the iPhone is no different. Perhaps, we'll see that change over time, but Apple has never really been an industry leader in giving end-users expansion/customisation options.
It may change over time as the iPhone evolves; but not much, I reckon.
I think that lack of customization was one of the first downfall of apples past and I think will cause the iPhone to loses its edge. Multiple other phones are coming on the market now that are taking away the advantages the iPhone has. Right now it has an edge but since the iphone release nothing really as change. Minus the compos all the other features added were catch up features (teathering, MMS, voice control, hell even copy paste) Those features are all on dumb phones already and on all the other smart phones. The iPhone still lacks multitasking and is the ONLY smart phone that lacks it.
Apple control freak will be its undoing.