How ignorant are you?That made no sense either.. true.. Apple has to approve an application first to make it "legally" an official Iphone.. Ipod.. w.e application.
There's nothing wrong with that? That way you have applications 100% compatible with the phone you are using without worrying if it's going to fuck up your phone!
Would you also like it if any application you installed on your desktop computer would have to be approved by Microsoft and distributed exclusively through a "Windows App Store"?
Do you realize how ridiculous Apple's scheme is starting to sound yet? Absolutely nothing would prevent the average customer from getting their apps from the App Store while more proficient people could also install things from other sources, without the requirement for approval in the App Store.
That's how Android works - Google runs the Android Market but you can still install APK files from anywhere. And you really can't beat that.
(Oh, and if an application can "fuck up your phone", there is something seriously wrong with the phone's security architecture.)