And thats the key - Apple made no qualms that App distribution was something that they were going to control and that not everything was going to be approved. That was over 2 years ago. If you (as a developer and user), do not want to be bound to that model, that is your choice. Its definitely not a perfect or an ideal system, but people are buying into it willingly.
There is no law that states that Apple has to approve all applications. Apple does not have a monopoly on phones and if people don't want to be bound to Apple's business model, than they should not be purchasing Apple products. People are. We have to remind ourselves that Apple has never been about choice. They sell products based on what they like. They have been doing this for years and nobody has stopped them
This. This is the reality. It might be hard to see through all the geek-tears around here, but this is it.