I agree with what you said, and yes, in reality as the battery gets older it becomes harder for the system to maintain a high level of performance. So the end result is a slower device.What you describe is the ideal, theoretical scenario which unfortunately not how it works in reality. If the battery is sufficiently deteriorated, it is not able to maintain its original current and/or voltage levels — no matter whether it charged or not. An old battery, even if fully charged, might only provide power at a level of a new battery that has been almost depleted. In both cases, the power delivery is not up to its design specifications. And if you are running on battery, and your CPU is attempting to boost, the result will be a crash with potential data loss.
Again, I don't know how this safety power throttling works in practice — there could be some driver-assisted feedback from the battery controller or maybe the CPU's power management is automatically limiting consumed power to safe levels. Regardless, the practical consequence is that laptops artificially limit their power draw if the power system can't provide enough juice, as is the case with an old, damaged or otherwise problematic battery — no matter whether its fully charged, at 80% or not charged at all.
The original experiment, the one that exposed this whole mess, showed that iPhones with an older battery are constantly slower than they should be. Now, perhaps in the way to reduce the PR disaster, Apple has been very vague about how exactly their dynamic algorithm for slowing down the phone works. If it's kosher, they would have come out and said that what they are doing is the standard practice that's been done by years by intel, Microsoft, Google, and othersAnd how do you know that this is what they do? It would make much more sense for them to monitor actual power output and not speculate on cycle count (which is very individual and can vary greatly from battery to battery).
My guess? Apple has been rushing software changes and features without necessarily paying too much attention to optimizing for power consumption. Can you tell me why this was added to 10.1 and not iOS 1 or 2?