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This is Apple.  Actually, let me try that again...

THIS IS APPLE! 

Anyone shocked by this is a fool.  Lockins and extreme control over their machines are what Apple does.  After so many years of locking down their own OS, did people really think they'd release a cell phone SDK without legal/technical restrictions?

All that is left is to see how much this actually damages iPhone development.  I get the feeling that most of the core Apple fans (those who already know Objective-C) won't be phased by this.  It's negative, but it's likely immaterial in the long run.