The iPhone is a cool platform to develop for & the AppStore is where the audience is ... not to mention that making a little money on the side is always nice.
People are upset because Apple is taking a good chunk of their money and providing a piss-poor service in return. With the current state of said service relying on it as a professional is a bit of a gamble, but as a hobbyist I can live with it.
I tried developing for Symbian (S60) and WinMo, but neither was what I would call an enjoyable experience. In contrast, programming for the iPhone was far more fun than programming for the platforms that came before it, in part because the target hardware was similar enough that you had more freedom to push the boundaries. So I can understand why some people are attached to it.
That said, the situation is a bit better now, with Android maturing fast and the other manufacturers starting to raise their game a bit.