Exactly. I keep hearing App Store being compared to physical stores. Something like: "Walmart gets to choose the items they place on their shelves, so why should the App Store be any different?".

In fact, Walmart is fairly picky about what they put on their shelves, especially when it comes to music CDs. We can argue that Walmart's control on the CDs it distributes might have a stifiling effect on the type of music that gets released. However, Walmart is not the only place allowed to sell CDs. Yes, it might suck that you have to make a Walmart-specific release of your album, but that doesn't prevent you from releasing a more explicit version elsewhere.

This is not the case with the App Store.