Ok, we are getting nowhere with your "not as simple & multifaceted" counter arguments. In an argument, don't patronize your opponent, just focus on defending and making your points.

Obviously things are not as simple as they look, otherwise, we would not be talking about it.

Now that this is out of the way. I think that quality is a pretext. Apple could have let developers distribute their application by other mean, and keep the same AppStore quality. The fact that AppStore is the only way to distribute an iPhone app does not make it higher quality. I would actually argue the opposite. If developers had other means to distribute their mobile application, Apple could fairly refuse the "iFart" type of applications and accept only applications that have real entertainment or productivity value.

Also, I know people developing iPhone apps, and while they welcome the additional income, it is not that easy to make a living out of it. Some might, but I do not think it is as big as people think it is.