The issue with all of the so-called indie game development paths for the various consoles and mobile platforms out there, is that "independent developer" from the eyes of these corporate giants means "self funded" ISV, not "garage operation/bedroom coder".
Meaning, you still need to be represented as a legitimate business ISV to get in the door, and more often than not, you have to have a proven track record or nearly complete prototype to be considered. Take Ste and John Pickford for instance. They have an amazing portfolio of games, and even have a past business relationship with Nintendo. But despite that, they aren't terribly optimistic about becoming a WiiWare developer because of a few technicalities in their business model...
(
http://www.zee-3.com/pickfordbros/blog.php?post=5484&blogger=Ste )
I think that's where a lot of the rejections from Apple are coming from. Still, my point is, thats a lot of investment in a non-portable technology up front only to have the possibility of the door shut in your face at the end. For some people, that risk is very dire and large.
Yes, Apple maintains the system. Don't develop stupid software such as the "I am rich" app or software that interferes with Apple or AT&T's business model (like the USB modem app) and you'll be fine. There's regulation but it's not subjective in the sense that someone will play your game and decide if it's marketable or not.
Their regulations are intentionally ambiguous. If you happen to be developing something similar to something they are already developing in secret, you will be rejected.
If you've developed the 10th game that looks similar to the 9 that have been submitted before you, there's a good chance they'll reject that too.
Yet, at the same time (as some developers here at Blitz have proven), the less risky and most profitable ventures are the ones that are established (insert your generic match-3 title here)
Like all the consoles, the early developers have the edge of coming to the market with little to no competition. Over time, the odds get lower and lower. This lifecycle pattern will be identical for the iPhone.