Q: Why is Apple the exclusive distributor of third-party software for iPhone and iPod touch?
A: Somebody has to take full responsibility for customer security. Apple is taking responsibility for security by issuing developer certificates that irreversibly link every app a traceable, physical creator. Apple is a good groundskeeper, too; the site's always going to look splendid.

Q: Why do I have to pay $99 to write code for iPhone, and what's that buy me?
A: You can write code for iPhone for $0; download the tools from developer.apple.com. Mess around in the simulator to see if it piques your interest. If it does, then $99, plus answers to the validation questions that Apple will ask, gets you a certificate that will burn your name into your code. When you get that, you can start debugging with a physical iPhone or iPod touch. And you can upload your software to AppStore.