Well that's the problem in a nut shell. It is and it isn't... but it should be.

Yeah that's the problem entirely. We need legal regulations here to force Apples hand. If you can't define in simple terms what specific category of entertainment your device falls under then you've made a general purpose computing device and that must come with requirements that users can load whatever code they desire onto it with your blessing.

Allow users to do that and they can put whatever rules they want on their store.

Feel free to start your own company that makes phones that behave however you want. Why should you get to decide what other people’s products “should be”?

why shouldn't people that have to use the platform have some influence over it given the level of integration iOs seeks to have in their users lives