Who gets to decide if there is "no reasonable need"? Apple clearly believes (just like the microwave manufacturer) that there is "no reasonable need" to extend the iphones software.
When you buy a microwave, you are buying it to heat food. You are not expecting to be able to browse the web on it or play games. If you are, then you need your head examined or to invent this new product (if you are right that it's a reasonable/desirable expectation, there should be a market for it). I think the distinction is actually very very clear, continuum or not.
Once the microwave starts allowing for remote control and twittering its status, the line does become more blurred ;)
iPod classic, it's not going to hurt anyone if you screw with the firmware, you should be free to tinker to your heart's content. There are also enough obvious deficiencies (lack of support for a variety of codecs) which can be improved.
Same with a TV, the Kindle, the Drobo.
However, no one is clamoring to write apps for a microwave. A microwave really just has one function and as long as it does that one thing then it doesn't really matter how the software works.
To a hardware hacker that would be a false statement.
Tinkering with the software on your phone has much less potential to do so, for me it's simple if it has software in it and you bought it then you should be able to tinker with it.