However your next paragraph confirms my suspicion that you're relying on your own definition of "censorship" (see the bold phrase above.) Censorship is not stopping the creator from producing the material. That is not the definition. Censorship is when an entity blocks distribution of specific material. Apple is, in fact, engaging in censorship by the actual definition that term.
But let's work with your definition of censorship. Since the App Store is the only legitimate distribution channel for iPhone apps, there is no way for the authors of the iPhone apps to distribute their work outside of that construct. Therefore, they are effectively unable to publish their apps. So, even by your own extended definition, Apple is engaging in censorship.
Mirriam Webster defines sensorship: 1 a : the institution, system, or practice of censoring b : the actions or practices of censors; especially : censorial control exercised repressively
and sensoring as:: to examine in order to suppress or delete anything considered objectionable <censor the news>; also : to suppress or delete as objectionable <censor out indecent passages>
Given these definitions, I agree with you. My next thought is, I am not sure which is worse, a company (not the government) that decides it does not want to sell a certain product because of its business decisions, or a company being forced to sell a product it does not wish to sell out of fear of being labeled a censor. I don't want the State (referring to government, not a company) telling me what I can not say, nor do I want them telling me what I have to say. It seems to me that if Apple were forced to sell these apps, it would feel as oppressive. I understand what you are saying about the closed iPhone app distribution system, but I still feel like its Apple's ball game. These app developers could develop all kinds of other apps. No one is stopping them from that. And these developers can develop for other platforms.
People talk about the slippery slope when it comes to freedom of speech, like today wobble apps and tomorrow politics. That's a great topic, but perhaps best held in a civic's forum. I don't live in the US, but as an ex-pat, freedom of speech (again, another whole topic as to what is covered in that) truly is awesome. That it is going on here on this board is pretty cool. Thanks for engaging on the topic.
One last thought from me, wobbles or sans-wiggles, I think my iPhone is one of the best purchases I have ever made. I finally feel like technology is serving me, not me being a slave to technology. Now that is fantastic!