The big picture is being missed here:
This is a thing that annoys Steve Jobs, and another reason he isn't fond of Google right now. When a developer puts a free application on the iTunes store Apple gets no money. To makes matters worse, when a free application places ads on their application Apple gets no money, and the developer gets money via ads. The final kick in the nuts is the fact that if these ads are served up by Google we have the developer AND Google making money off an application served up for free in iTunes and Apple gets nothing still.
Apple will fix that problem the following way:
-Probably not with 4.x, but with 5.x on developers will be forced to use iAd if they will place advertising in their applications. Ads via Google/Admob will be denied saying some excuse about "poor user experience".
-If Apple does not flat out deny applications that serve up ads via Google then they will charge developers for every download, regardless if they are sold for free in the app store or not.
I guarantee Jobs is peeved at the fact Google is pulling in probably millions in revenue via iPhone applications while Apple doesn't get a penny.