I don't think Apple would agree with you and, since they make the device, they pretty much get the final (official) say on that. They view it as an appliance that happens to combine several different sets of functionality into one physical device. If you break out each component you'll see they're almost always very tightly controlled and otherwise not open to general purpose (unlicensed) access.

iPod / PMP (Apple, Microsoft, Creative) Camera (Cannon, Nokia, Sony, etc) GPS unit (Garmin, Tom Tom, etc) Phone (cheap flip phone) Gaming device (PSP, DS)

There are exceptions of course -- and workarounds/hacks to circumvent protection (just like Jailbreaking on the iPhone) but more or less these sorts of closed appliance like devices are quite popular on their own. Apple simply combined them into one physical device and kept the same rules.

Apple doesn't sell the iPhone as a general purpose computer so any consumer who buys one expecting it to function that way probably bought the wrong product. I can understand why someone might want that option but it doesn't change the fact that Apple does not sell a product that fits those needs and, based on the success of stand alone devices sold in the same fashion, it is almost completely irrelevant in real world sales or usage for most people. There is of course jailbreaking -- there's also Linux on iPhone hardware. I'm not sure how much progress they've made but I seem to recall they at least had a booting kernel a while back.