This isn't really an option if you actually want iOS apps. It's an all-or-nothing play by Apple: accept all our rules, including the ones that greatly limit you, or get none of the benefits of iOS, including the large collection of high-quality apps. And the option of jailbreaking really isn't an option either. Apple does its best to prevent jailbreaking: they'd stop it outright if they could. This is their way of keeping that market unpleasant, small, and marginal.

The argument is that that approach is anti-competitive and unfair, especially since Apple itself gets a large cut of app sales.

I'm not coming down hard on either side, just yet. But I don't like the feel of this sort of lock-in, and almost no one would question the use of a term like "lock-in." Some lock-in is surely legal, even if almost always unpleasant. But it's only a hop, skip and a jump to full-fledged antitrust.