"Free (arguably) open CIL, languages, document format, IDE, documentation."
Actually, Visual Studio Express doesn't even include a profiler, IIRC. The profiler is included only in the much more expensive enterprisey Visual Studio team edition (or whatever the hell it's called). All of Apple's developer tools are completely free and come with OS installation DVDs. Apple's compilers are based on gcc, and, per terms of the GPL, Apple's patches are sent back to gcc's maintainers.
"Meanwhile 4000 devs are going to make ALL the applications that the masses could ever want on an iPhone."
Where did you get this idea? 4000 people are in the beta, and there is no reason to believe that Apple won't let absolutely anyone on Earth develop iPhone apps as soon as the SDK reaches its final release.
"Heck, why isn't it free to push open source projects?... It seems like they have it out for open source / small business / hackers."
The iPhone App Store is free of charge to developers who choose to release free software, so I have no idea what you're complaining about. The store also lets independent developers set their own pricing. If you don't like that you can't just zap apps from iPhone to iPhone, (1) that's mainly done for safety reasons, and (2) you actually can, with the ad hoc signing mechanism discussed in WWDC keynote.