I think you underestimate the repetition there is in the app market: identical book wrappers around hundred of different books, club/idol fan apps that are identical except for a few logos and urls, and so on. And not every app is regularly updated.
Moreover, Apple has strict guidelines about good coding practices, and they have the tools to enforce them on the source code. That's much more than the Android market does, even counting the virus checking that the parent post mentions. So even if all Apple would do is run code inspection tools, there would be significant difference in `vettedness'. In reality they must have tools to make sure that a supposedly innocent book wrapper doesn't use any network communication at all, and similar common-sense checks, and they will have have some knowledgable people that handle the difficult cases. Last but not least, one reason they have this reputation for capricious rejections is that they err on the side of caution.
Calling all this just security theater is not realistic. No, it will not catch every bug and malicious trick, but I'm sure the lock on your front door can also be picked by a competent burglar, and that doesn't make that lock security theater.
Both the Android and the Apple approach have their advantages. It's a bit like a holiday: some people prefer organized trips, some people prefer to do all the planning themselves. But do not underestimate the value of the organized trip to some people; it gets them to places they would not go otherwise.