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That's a bizarre argument. It seems to imply that Apple could avoid these allegations by either increasing or decreasing the restrictions they place on third-party developers.

How does it imply that? Which of those devices you mentioned (e-readers, GPS devices, car entertainment systems) have a store for downloading apps? If they do, then yes I would like to be able to put whatever I want on there without the approval of some corporation.

Isn't that specific use mostly artificial by restricting your ability to install things though?

If it's a CPU in a box, then it's purely a matter of what software you are allowed to install on it, right?