That's stupid. If someone makes a better podcatcher than Apple for the iPhone, the iPhone does podcasting better than before which sells more iPhones, which makes Apple richer. I don't see why it's such a threat.

Any time you implement a feature for a product you have to do it in a way that can't possibly please everyone. If you let your developers implement alternative versions, it's conceivable you could get close to pleasing everyone, which makes your product better because it then covers obscure use cases that you can't afford to deal with. It becomes as if third parties are developing the product for you for free.