Interesting report on Appleinsider about this today.
"Verizon, in those earlier discussions, balked at Apple's requirement that Verizon not allow its retail partners to sell the phone, people familiar with the discussion said at the time," the report said. "Verizon also declined to give up its ability to sell content like music and videos through its proprietary service, these people said."
Sounds like they've added on a content-sales myth that didn't exist in their original article back in 2007 on this topic:
http://www.appleinsider.com/articles/07/01/29/verizon_passed_on_exclusive_5_year_iphone_deal.html
The reason I say it's a myth, is because Verizon didn't bother with such sales to their smartphone users back then. There was no Windows Mobile or Blackberry VCast store at the time.
Smartphone users were totally on their own in 2005 when Verizon was approached by Apple. It wasn't until years later that Verizon started selling apps, and even then it wasn't mandatory to use their store.