I can readily acknowledge that some people made some amount of money on flashlight apps. I expect that research would indicate that it was in fact "very few people" and "very little money" (relatively speaking, at least; I'm sure it's so cheap to develop a flashlight app that practically any money would offset the cost).

As for your original point, I'll grant that you have a point, but I don't necessarily agree with it. I'm finding it hard to speculate about markets where I have no actual data, but my hunch is that the market for tower defense games is larger today than it was 5-6 years ago (i.e. I think the genre has grown more popular). I don't know whether that correlates with increased revenue for developers of tower defense games, or whether the number of games has outstripped the demand for them. Although I think it's fair to expect that there are a few developers making lots of money, and bunch of developers making a moderate amount of money (that may or may not offset the cost), and a bunch of developers making very little money. It turns out the App Store in general has a very steep revenue curve, with most of the money going to relatively few developers. But I think it's always had that curve, we just didn't used to have the data available to see it as well as we do today.

I think the more important question with regards to the App Store is not "how much money are developers making?", but "how easy is it for a new entrant to make money?". And I don't know the answer to this either, but I would be interested to find out.

I think you're right about the revenue curve, I think our whole discussion has been about whether the slope has changed over time. I've heard a lot here from developers that mention that it's harder now than it was, but that's obviously not a rigorous way to go about figuring the truth of the matter.