Most users do not know they are facilitating Apple's extortion racket, nor have they thought about what that implies for them. They just see a shiny iphone and think "oooh I want that"
The real genius is in why these customers want it. And that is, to paraphrase John Mulaney, “the everything about it”.
It's because they have some great marketing. But people aren't choosing the app store. They choose a phone, and then they are forced to use the app store if they want to add any apps.
Good marketing. Sticky ecosystem. For a while, they were extremely innovative (facetime/ipod/itunes/iphone). Network effects (facetime/imessage).