The deal is the same as it ever was: Apple can continue selling their extremely safe applications with their extremely secure payment system and state-of-the-art curation team; the only condition is that other shops get to play along too. There's zero downside to them going this route, I think it would allow them to further secure the iPhone by paring back the entitlements allowed for their store. Nobody would criticize them for this, but Apple's greed prevents them from conceding.
Just think about how you'd feel if your Mac could only use the App Store to install software. Personally, I wouldn't even be able to do anything on it if that were the case.