Apple could keep this curated marketplace and at the same time allow sideloading of applications, like many Android phones do. By taking that simple step, concerns about censorship would be ameliorated.

Impossible. Through careful thinking and reading up on philosophies of human rights and ethics, many people (myself included) have carefully cultivated values that take a deep offence to very public things deliberately crafted to offend nobody.

I mean, really, how long until the only way to offend someone with an iPhone is to chuck it in their face? ("Be glad that wasn't an unmanned drone you just got hit by!")

Or just write "for the prettiest one" on it, leave it at a wedding party and joyously partake of a hotdog (no bun).

There sure is a lot outrage over their policies for a marketplace that "offends nobody".