Well, Apple puts limits on what modifications its customers can do with their iPhones. It's a bit like selling a sports car that automatically limits your acceleration by putting a brick in between the gas pedal and the car floor. It's very easy for a customer to remove the brick, but the car company says, "No, please don't do that."
Specifically, Apple often only lets applications run if they're approved by Apple and not provided by a competitor (Google, say). It's ironically reminiscent of what Microsoft tried to do in the 1990s to make its Windows operating system intentionally buggy whenever someone ran Netscape instead of Internet Explorer. In American court, Microsoft was found guilty of monopoly antitrust violations in part because of this practice. Apple's essentially doing the same thing now, but they've been more legally sly.
Irony: although it's against Apple's policy to allow jailbreaking, it doesn't seem intent on ever prosecuting it, because if they did, they'd lose a small but significant share of their market: people who wouldn't buy the iPhone if they couldn't jailbreak it. So Apple gets to at least make money from these people by putting one policy on paper and then turning a blind eye when people do otherwise. (The most they've done legally is issue a statment saying it should still be illegal to jailbreak. Here's
the article, with a link to their statement, if anyone's really all that interested.)
My own take on it: if you buy an iPhone, you should know what you're getting. Yes, some of the apps only available after jailbreaking may be nice. But I wouldn't buy a car with a brick under the gas pedal for the same reason I haven't bought an iPhone: there are simply better options out there that don't come with a guilty conscience or debatable legality.
And may I end by asking if I'm the only one who remembers a day when we didn't need any fancy-nancy cell phones, let alone cell phone apps?