You can have free apps in the App Store as far as I'm aware. The only restriction that I'm seeing is that you can't put a GPL on it. But you could just slap on any other license for purposes of the App Store, and allow access to the source code from your website.

However, if you rely on other GPL'ed code then I can see that it would be impossible to do that, as then it break the licenses of that other software. In which case it seems that the strong copy-left is what's screwing things up.

It has been suggested elsewhere that the App Store probably excluded the GPL on purpose. Even if it didn't, it is unreasonable to say that it is copy-left's fault.

Also, I must repeat: "whatever the end user have access to is not free". My point is, if we want to free the end user, then the copy hold by the end user should be free. But a regular user isn't free to modify and redistribute the copy he hold on his iPhone, even if the original licence was a BSD one. Heck, even if he could, his modifications still have to pass through the App Store review process, which means there's no guarantee other users could benefits from them.