Earlier quoted context omitted.
Yea, I definitely think it's in my interest and the interest of the vast majority of iPhone users to have Apple make these decisions. I'd rather every developer leave the App Store than switch away from the current model. I'd just use Apple's built-in apps.
So how does choice prevent you from doing that? Mac apps do just fine with other install options while most still choose the App Store for ease and security.
For example, iPhone/iPad users being unable to install Adobe Flash accelerated its demise hugely, by motivating websites to remove Flash, not just add 'please install' links.