Palm is only partially getting the big picture of the iPhone's success. Admittedly, however, they're doing a better job of it than, say, the carriers supporting the Android initiative. The Pre is the closest thing to an "iPhone killer" out there.
But Palm, you need the apps. Nay, you MUST bring the apps if you want your phone to begin to compete on Apple's multiple levels.
I agree that the person involved in this Palm app flap is likely overreacting. And for the dweebs that don't seem to get it regarding Apple's vetting process for apps: Don't think the FCC wouldn't haul Apple to court (and the cell owners lynching any Apple employees they'd see) if Apple couldn't show that they've checked EVERY app they've allowed on their phone (and, as a result, into the international cell network) without reasonably ensuring that the app doesn't cause an individual's phone to die or, worse, infect the iPhone net (and others) with bad or malicious code that could compromise the cell networks. Sure, Apple seems sometimes political about the vetting (note a recent app about health care that Apple seemed to reject arbitrarily), but otherwise they're only hurting themselves if they don't allow most apps from being available.
The iPhone is (as a fan and an owner) an fair phone but a very powerful and extensible mobile computer and Palm must match that functionality. The Pre is it's only decent competitor in terms of its relative features, OS and flexibility based on its carrier's desire to support the hardware without butchering it down for carrier-only apps (**cough**Verizon**cough).
But the apps bring Palm only so far. They need a mechanism that isn't carrier marketing specific to support and augment the hardware features of your phone. For the iPhone, iTunes handles everything and fairly well. Palm must bring it's own iTunes-like PC/Mac application that handles syncs, mates with their new Amazon music initiative, can access their Palm app store, AND even (get this) use the approved Apple process for third-party iTunes library support that won't get them into trouble as they did with spoofing their hardware with iTunes itself.
Right now, Palm is shooting themselves in the foot if they are rejecting apps for any reason other than gross obscenity or copyright/IP issues. They'll soon headshot themselves if they don't get even a modest competitor to iTunes running, in my humble Mac-consultant opinion.