> It certainly puts a huge incentive on Apple to figure out technical solutions to problems like "How do we get other browser engines on this thing without compromising a hundred OS assumptions, battery performance, or user security,"

Virtualization? Run a hypervisor on the phone that allows running multiple virtual smartphones. Apple can provide two virtual smartphone environments, one that works like the current native iOS, and one that provides a basic smartphone that is wide open and on which you can install anything you want (maybe based on Android?). Make this second one open source so it can be a basis third parties can use to develop more virtual smartphones for iPhone hardware.