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It is apparent in hindsight that people don't care about the downsides of being inside a walled gardenThere's a danger in repeating such things as if they are facts, as the people that matter (e.g. developers, investors) start actually believing them. It's bullshit of course, but I don't blame you for being intoxicated by such propaganda.
When the iPhone was released, its success had much to do with it feeling like a portable computer that's polished instead of feeling like an expensive and failed experiment that was pushed on the market for the punishment and torturing of early adopters (like all the other phones before it, with the possible exception of Blackberries that I never tried). The iPhone for example was the first phone I used with a usable browser and a usable email client, two extremely critical pieces of functionality that every other phone maker was failing to deliver.
But living in a technological bubble, such as it happens when living in a place such as San Francisco where you see MacBooks and iPads everywhere, does tend to distort reality.
Fact of the matter is, customers don't care about walled gardens as long as they don't feel the walls. Take away some freedom they care about or show them what openness can do and they'll instantly reconsider their choices.
Example:
I went from an iPhone 3GS to an Android because of 3 things - I couldn't block calls and SMS messages coming from some annoying numbers (Apple was banning such apps from iOS) + I couldn't do Wifi tethering with my iPhone because the capability was disabled by my career + uploading music on it wasn't as easy as simply connecting the phone through USB and copy/pasting files. Nowadays I have other reasons too, including the fact that iOS does not allow Firefox. And I also remember fondly when Google Voice was rejected back in 2009, because it "duplicated existing functionality".
I later explained my reasoning to two other non-technical folks, showing them what my Android could do that their device couldn't. They are now Android users. And I can probably convince more people of how dumb and locked down their expensive gadget is, if I cared enough, but I don't because Android is number 1 without my help and openness had everything to do with it (being a doubly edged sword no doubt, since open also means open for careers and phone makers).