And given that IBM wasn’t interested in servicing Apple’s needs for consumer level chips (and Motorola, the other company in the PowerPC consortium, was struggling to scale up manufacturing), Apple’s pro machines like the PowerMac were struggling to keep up and improve. One PowerMac model with PowerPC G5 (IIRC) was even released with liquid cooling and had some customers complaining about leaks.
The driver for the processor switch was actually Apple’s inability to get the right kind of chips it wanted on scale. As others have mentioned, the in-house design and the ability to get its chips manufactured for iPhones on a large scale triggered a big wave (of competitive advantage) for Apple. We’ll only see more of this as time passes.
Their major value proposition is that they're able to build software-differentiated hardware, so building their own chips is extremely valuable to them.
A huge portion of bugs and power issues on a modern PC stem from poor hardware drivers. Cutting out the middle man and just writing all the drivers themselves may very well be a net win for Apple if they want to keep a reputation for working hardware.
Then again they have gotten have their lighting out for display working quite right.
The inclusion of custom silicon isn't new either.
Nor are in-house drivers for commodity equipmemt, as the move from NeXT Computer, Inc. to NeXT Software required it.
As you point out, by ceasing to rely on third party IP in that custom silicon they reduce the complexity further still.
100% in-house widgets have been on the whiteboard at Apple for a long time.