Man, this is depressing. As are Apple's terms for the iPhone/iPad store. I'd advise anyone who wants to develop for the iPhone/iPad to stop dealing with iTunes, distribute their work themselves (free and open source) and invite people to jailbreak their products in order to install it.
And lose out on whatever chance they had of making a decent profit? I doubt that this jailbreak ruling is going to result in a spate of common-joe iPhone hacking.
I agree it's not ideal profit-wise, and neither do I expect every iPhone user to be interested, let alone technically savvy, enough to jailbreak their iPhone. But I find the fact that the executable won't be free even if my source code is (and I don't mean free as in "free of charge" - people deserve to get paid for their work and then some) a farce, at best.
How is that a farce? The distribution model of the App store has been clear from the start... It's take it or leave it - but depending on jailbreaking for a mass market app is clearly not going to work.