Yes, it's implemented under the guise of "choice." That's quite a loophole for Google.
Morevoer, it's still a complete duplication of Apple's entire telephony interface, which is a big no-no. That's not the kind of app I'd expect Apple to approve. The iPhone isn't Google's personal playground to test out their mobile services and start messing with user data. That's what Android is for. Google is really stepping on Apple's toes here and raising the ire of AT&T as well. That's a problem.
Further, there remains the concern about what Google will do with your information. If that is unclear, or if Google has otherwise not provided any clarification about that, that's grounds enough to reject the app.
Again, you go sounding like Google is ramming this down your throat. They aren't. You go to their page and you subscribe willingly to this service if you want to use it.
They don't duplicate Apple's functionality, they give you an access to your GV voicemail, if you want to use GV voicemail, they give you a dialer, if you want to dial using your GV phone number, and they give you online contacts, if you want to access them via Google Apps.
They don't think the iPhone is their playground, they provide a convenient interface to their service, because the Web app doesn't support push notification (obviously). All the services are already available, just not as convenient to iPhone users.
And Google provide the same convenient application for their subscribers (willing subscribers, again, if you are scared by their service, you can just choose not to use it, there is no illusion of "choice" like you say) on many platforms, including Blackberry and Android. It's funny, RIM hasn't pushed them away and neither has AT&T.
As for what Google does with your data, that is covered by the TOS you get to read and accept upon subscription. Nothing is hidden away and everything is presented to you so that you're able to make an informed choice. If you don't want GV, don't use it. I don't see how Apple is right in blatantly refusing the choice to other users of their phone, lest they want Google Voice subscribers to go with the competition (which is getting fiercer everyday).
In the end, if they continue on this path, soon they will get supplanted by the competition and they will basically kill the iPhone platform themselves.