Looking at your arguments of why this is wrong:
The terms of the GPL specifically allow, and do not place any restriction on what is to be done with any money collected for selling a binary with GPL code in it. The license just requires that the code be made available. If you wanted to have some different restrictions on future use, you should have chosen a different license.
No sustainable competitive advantage
Here you are just attacking their business plan. It is a borderline ad-hominem attack. You're saying that because they're bad businessmen, they're should be forbidden from doing what is allowed by the license. In fact, you are attacking, in this stroke, every commercial use of GPL code. A bit bold, perhaps?
Alienation of contributors
Charging is allowed under GPL. Really specifically allowed. I guess the reason that there are so few linux variants and so few OSS contributors is that there are companies selling linux distros, or license for enterprise linux.
Limited user base
This is another attack on them, saying that they don't care about the game because their actions are reducing the potential field of customers on the iphone. The customer base would be zero without them, and since all of their sources are free, somebody else (cough, you) could make it available for free. And yes, they would be powerless to stop you, and would have no right to feel upset at you if you did. You make your bed, you lie in it.
You seem attached to a "Free as in beer" definition of GPL, which is a view that gnu quite explicitly does not share with you. http://www.gnu.org/philosophy/free-sw.html
Perhaps your problem is that you just chose the wrong license, and you should have made your own, rather than reusing a free license that didn't meet your needs. This is the price of trying for "Free as in beer". You get what you pay for, and you really have no say over what you get.