That's not the only option. We don't allow property owners to randomly abuse other people as long as they're on their property. We don't tell those people, "well if you don't like it, just go somewhere else." We have laws that apply no matter who the owner is, to prevent abuse.
A closer analogy is we do allow private property owners to decide what signs and other publicly visible items may be present on their property. Property owners are allowed to dictate who's allowed on premises. We also allow private organizations to decide who may join their organization. Stores are allowed to decide what products they retail. Private media are allowed to decide what they broadcast.
The App Store, for better or worse, is not a public good. I may not necessarily approve of some of Apple's decisions, but they have the right to make those decisions.
And no one's being abused. If you don't like it, leave. You're not being forced to support Apple in any way.
Why is the curated walled garden so egregious with a smartphone?
I'm not sure I recall Apple ever bragging about being an "open" marketplace past the "If you don't like our app store, build a web app" statements they've made in the past.
And as for "After an item has been sold, the former owner has no say in how the item is used by its new owner.", that depends. For commodities, sure, but there such things as sales contracts that can restrict what is done with an item that has been sold.
The point is that walled gardens have been around for a long time, but it seems like people are more likely to get their knickers in a knot when Apple does it.
Were this something happening against users' will the, yes, I might concede it's abuse. It's not; users love the app store and a large part of that reason is because the content is curated. It's Apple's store (not a public marketplace) and they know what they purchase isn't likely to be offensive and is likely to work as advertised. You may not like the App Store, but Apple is definitely not abusing users.
Apple makes it very clear: "We view Apps different than books or songs, which we do not curate. If you want to criticize a religion, write a book. If you want to describe sex, write a book or a song, or create a medical app. It can get complicated, but we have decided to not allow certain kinds of content in the App Store."
Go to Walmart and take your clothes off and see what happens. Nobody dragged you into that party and I'm guessing nobody even invited you. You looked at the market and picked what you thought was the best.
Stallman and his "free" Chinese tech are always at hand if you really feel abused.