Sorry; you must have mistaken me for an iOS developer. I am an end-user.
Nothing on your list gets within shooting distance of "misery" for me, except perhaps tethering, which is now a non-issue since Verizon changed their data plans. Now I tether effortlessly.
The non-Apple apps that I use the most are Fandango, Flickr, Zillow, Facebook, Kayak, and VLC. These were all free. You claim there is a disincentive to releasing free software, and though it's not apparent to me, I'm willing to take your word for it.
On the other hand, I understand developers like to get paid, and given that my nephews have had more than five hours of fun playing "So Long Oregon" on the iPad, I'm don't begrudge the author the two dollars they were asking for. I remember when all they wanted was Nintendo DS games and those cost thirty dollars each. Even now - today.
No competition with Apple apps? Look at it from my point of view: I don't care that there aren't ten different apps for playing music, seven for chatting, five for browsing the web, and three for reading email. To me, it's a challenge and an accomplishment to just get ONE DAMN SONG onto the thing, from my computer to the iPad, and get it to play. And hey! It turns out I don't have to. If I bought it on the computer, now it just shows up on the phone.
Do you understand my point of view? I am far from miserable. Maybe the traditional car metaphor will help. Playing music on this thing is as essential and obvious as a steering wheel is in a car. You're saying I should be miserable, because there isn't a thriving market for installing a second steering wheel in my car. I just do not care. And there are millllllliiions of me.