The verdict? Schiller says the process is in place for a reason. About 90% of the apps submitted merely have bugs or technical issues, and he says for the most part that devs are happy to get that feedback (though TechCrunch doesn't buy that for one second). But the other 10% of the apps Apple denies are simply what they deem "inappropriate," which could be anything from problematic coding (code that steals passwords or other private information), or app content that doesn't belong on the store, from porn to apps that help break the law or steal in some way. Apple is also vicious about trademark defense -- Schiller says that "if you don't defend your trademarks, in the end you end up not owning them."
That all sounds fine and dandy (ok, well, the "inappropriate" label is a little unclear -- that's broad enough that Apple could fit almost anything under that umbrella, which is a bit troubling), but what about all of those angry devs? Unfortunately, Schiller doesn't address at all the idea that Apple might someday allow devs to release apps that haven't been through their approval process, on the App Store or anywhere else. As far as Apple is concerned, it seems like they're keeping their grip on what gets released, and anyone who doesn't like it is welcome to go elsewhere.