In the terms of eBooks, Apple is a small time player. Their selection is small and they don't have a lot of the big names behind them. Thus if a small publisher said to them, "We require you to prevent our books from working on JailBroken Devices or we are going to pull our entire library." they will listen. Where as if that same publisher says it to Amazon who is a giant in the field, Amazon may easily say, "Ok, bye!"
It really sounds like a Publisher put pressure on Apple to do this. But even if they didn't, so what, they are just trying to protect their clients and that is what they SHOULD be doing. Given the fact you can still read non-DRM content, it sounds like Apple TRIED to make everyone happy by protecting the purchased content but not totally eliminating functionality.
You really can't make everyone happy, someone is going to bitch. And in this case it seems like a bunch of people who think they deserve the world.
If you have a problem, remove the DRM from your books and then the phone will read them fine. I don't know of any way to remove the DRM from the Apple books, so for those, you may be SOL. That is why I don't by my books from Apple; I buy them at other stores where I know I can remove the DRM. Am I a thief? Nope, I buy everything, but I also like to use it in the way I want and not tied to one type of device.