17 year old geek makes $130,000 selling White iPhone 4 conversion kits

Agree with you but is not whether there's a good reason or not, it's about Apple protecting their brand. They probably won't sue him, at least that's what I'm hoping for a young entrepreneur, but he is definitely not going to be able to keep selling his conversion kit. His supplier is in big trouble.

He is selling licensed parts for Apple that he got directly from foxconn while making a profit from them, and you're complaining about legal action?

If I hire someone to steal something, we are both at fault and could reasonably be held responsible. If Apple made agreements with the manufacturer in which the dies/plans/whatever are the property of Apple and can only be used to make parts for Apple (which would make sense), then the manufacturer is clearly stealing from Apple by providing the same parts to another party.

I think it makes a lot of sense for Apple to sue his supplier. It may also make sense for Apple to sue him, legally, but the cost/reward of legal action against a poor minor is probably not worth it to Apple.