Even though I can't build iPhone applications, to me this ban makes sense for the following reasons:
1.) Limits the total number of applications. Apple knows that the "100,000+ apps" is just marketing. How many unit conversion applications do you need or does Apple want clogging up their approval process.
2.) Reduces the velocity of the application submissions. Having a more controlled ecosystem means that everything isn't done at once. This is core to Apples strategy. Roll things out in phases; build features that people want over time. Cut&Paste, Multi-tasking...
3.) Forces people develop iPhone applications on Mac hardware.
4.) The more layers between you and the developers building the applications increases compatibility issues, which are out of your control.
5.) The more layers between you and the developers building the applications decreases the speed at which applications can take advantage of new features. Apple releases a new api now any developer using a 3rd party framework needs to wait for that framework to support the new API. This impacts the significance of the new feature.