So I'd have to almost quote-reply everyone, but *selling physical and digital are different* (even consignment for physical is different though obviously closer and there is reason most physical stores operate on the wholesale model). Regardless of which way you feel about this, arguing by analogy is generally weakened by the differences between the two things you are trying to relate and claim to be the same. It isn't a logical fallacy, but it is (often) a weak argument (except when I do it, in which case I'm sure it's awesome

).
No most developers would not prefer the wholesale model be applied to digital, that would kill indies.
No the $99 a year doesn't come close to paying for storage and content delivery for something like the App store. Increasing that to offset lost App store revenues would hurt indies.
No saying developers have the right to advertise in their own apps where you could get things cheaper isn't like forcing Target to advertise their competition, but at the same time recognizing that App stores and their products, especially those with in-app purchases, are more heavily entwined than Target and its products is important. Yes if apps like Spotify, which compete with an Apple service, offer subscriptions or IAP through the App store, then they have to give a platform that is also a competitor x% of their revenue unless the customers go through extra steps that Spotify isn't allowed to tell those customers about. There's no other way to sell to iOS customers in-app. The best they can do is offer a free app with just a login and no other explanation of how to sign up. Hardly a deal breaker, but it makes it more difficult for the iOS customer.
No neither Apple nor Google are unique in this in the grand scheme. Even with the differences between physical and digital, Sony, Microsoft, and Nintendo all make money off of physical game sales regardless of where you buy them from (except used - see side note later). Also their digital stores and IAP are also walled gardens and have sold for awhile digital exclusives that you couldn't get physically. Further the new Sony/Microsoft consoles all come with digital-only versions to kill the physical market (side note: the primary intent of killing physical is not to stop Walmart or whoever from getting a cut, but to kill used games sales). And, no, not all consoles are sold as loss-leaders (e.g. Nintendo) and many that are sold as loss-leaders at the beginning of a console cycle are not loss-leaders by its end. So that argument doesn't apply either.
Yes Apple and Google exert an enormous amount of control over the mobile markets. Yes, they also essentially developed those markets and those market have been hugely beneficial to everyone, a rising tide that lifted all boats (including Epic and Spotify). Yes states have a right to examine what level of control is healthy for the long term of the markets and the economy regardless of how beneficial that control may have been at its beginning when those markets were small. Yes states can also screw this up. No, neither Epic nor Spotify are fighting against Apple and Google for "the little guy". No Apple and Google aren't really on the side of "the little guy" either. No the impact, positive or negative, on forcing devices to lose walled gardens or at least lowering the walls isn't clear. There are positives, but there are also negatives to almost every possible change. Further, as alluded to in the previous paragraph, despite Epic's claims to the contrary, such changes would invariably affect consoles too (and don't believe they haven't thought about that). Again, not necessarily a bad thing, but it would happen.
No, Epic's claims are unlikely to succeed in (US) court. Weirder things have happened of course, but I think they're hoping the case will put pressure on regulators and lawmakers in the US change the rules rather than a court ruling in their favor which is a longer shot. To wit: walled gardens are not intrinsically monopolies and in the US you have to prove a monopoly is harmful to consumers. The EU and other states have other variants on monopoly rules which might give Epic, and especially Spotify's, claims more potency in court, but even then I'm not sure. (Full disclosure I am not legally trained, this is my reading of people who are and the initial reaction of the presiding judge to each of Apple's and Epic's opening legal moves)