That would be massively anticompetitive to use the profits from the hardware business to subsidise the app store.Given the profit margin on an iPhone ranges between 40-60% I’m sure this covers hosting costs. Operating servers for the App Store is part and parcel of the iPhone experience. I still don’t see it as freeloading. If you released a free app that became popular would you delete it out of guilt?
The app store needs to be self-succient. You wouldn't expect any other app store to operate at a loss.