You can use the ISO download to install the same way that the App Store does. Again since you missed all 3 first times :
Mount it. Run installer.
You cannot install from mounted ISO's. Not OS X. It always needs to boot from it. There are some "hack" ways to do it, like getting into the invisible folders and finding the install packages and installing them one by one, and even then it's not always guaranteed that the installed OS will boot.
The App store requires me to have OS X to purchase and download the installer. An ISO could be acquired and downloaded from any other OS or computer in case a Mac is not readily available. An ISO is much more versatile, unless you don't actually know what versatile means.
Well, if you are installing OS X, that means you have a mac. If that mac has not OS X installed on it, then ok, you have a point. You can't buy Lion without the old OS X. So what you are saying is that in the following situation you can't use App Store app:
You lost your OS X disc which came with your mac and your macs hard drive got somehow erased and no OS X installs are there.
I'd say that's a pretty low probability situation but I give you that in that situation an ISO is better, that is, if you have a PC lying around.
Seems to me you're just trying to defend the Mac App Store here. It's fine for apps. I don't personally like it or use it, but I don't think it's a bad thing. For an OS install though ? Way too confining and restricting. It lacks versatility.
I'm not trying to defend it. I am defending it. Like I said, the App store install App gives a much faster and convenient install process for me. For years I always installed OS X through copying/burning it onto some external drive/DVD-R and then booting from it, and even if you do it from a SATA partition to save on time, it's still more than twice as fast to use the installler App and just install. No burning/copying anymore.
So for me, and the way I install OS X, this way is more than twice as fast.
About versatility, like I said, as long as you have a mac, and I assume you have, just copy the App on a USB stick, and save it somewhere.