First off Apple does have the right to stop it if they want to

they made iTunes and they make the updates
Secondly I can almost guarantee that they will block it

or a slight chance of letting them pay rights to use iTunes (pay through the nose)

, because if they don't stop them, that means that other companies are going to do the same thing and make cheaper products which would directly impact the sales of the iPod and iPhone.
Face it Apple is a company,

and they are doing business to make a profit.

Just because you, as a customer, want the ease of use of their products and don't want to pay their prices, doesn't mean that Apple has to let another company make a profit off of their hard work.