I find driving with a cellphone to be a lot more distracting than talking to passengers. One problem is that you're, y'know, holding something to your head. Bit of a difficulty to turn your head at a moment's notice, etc. Another problem is that (at least for me) using a cell phone puts my brain into that "this is a very urgent matter, FOCUS NOW" mode, thus severely limiting my concentration on driving. And that's my two cents there.
Back to the Apple issue: I find it rather hard to deny that this is bad parenting. Personally, I won't be giving my daughter anything more powerful than a tracfone until I'm certain she's old enough to make good decisions. Even then, her app purchasing will be tied to her own separate bank account.
As far as letting your child play games on your phone:
In case you haven't noticed, smartphones are rapidly becoming closer and closer to actual computers. Given that, you should really be having a talk with them about these sorts of things before letting them use it in any way that doesn't involve you watching over their shoulder the entire time, the same as you would before allowing them to use computers.
Bottom line, blame the parents before blaming the company. I'm sure there are cases where this isn't the case (decide for yourself whether that was intended), but I'd eat my hat if they were the majority.