Yes, it is a security standard issue, but it's enforced with hardware. So, while this is there for a reason (possibly even setting a standard for these IoT devices), it's not simply a lack of developers building secure software. It's with the hardware not being spec'd to meet these "arbitrary" security standards. I say arbitrary because clearly no one else in the game is using it. So, I think the OP is correct here, Apple has made a product that simply doesn't work with other products due to their own decisions.

Edit: Typos

As a disclaimer I'm not really an apple fan and have found all of their products to be blah to me.

Considering the rise in IoT based DDoS attacks and the ftc going after companies like D-Link for poor security practices, aren't security standards like Apple is requiring something we want to commend?

Insteon is still an insecure and unencrypted protocol, just the new homekit hub is 'more secure' now, controlling insecure items.

You can also install a general homekit proxy with a general nodejs server called homebridge. That homekit proxy can control anything with any kind of security.

So at this point it's just another proprietary standard unfortunately :( Might as well call it another MFi program.

It is part of the MFi program.

What would you like Apple to do?

The same standards that let a stranger stand in front of your door and say "hey Siri, open the front door" and walk right in?

Out of curiosity, how does the required chip/hardware help defend against this?