Steve Jobs is not Lord Chamberlain.  He CANNOT be Lord Chamberlain, because he is not running a government.  What Steve is running is a company.  A private (albeit publicly owned) company that is not beholden to any sort of the same things that governments are.  They have the tacit right to block anything they choose at their own discretion.  If people don't like it, they can, as Jobs says, buy an Android.  Personally, I'm impressed with Steve's response.  He didn't beat around the bush, he didn't dodge the question, he just said "no."

Is this indicative of some new police state that upholds morality in A HANDMAID'S TALE dystopia where the only thing that is publishable is snowboard racing games and unit converter apps?  No.  I think that you know that if you get an iPhone/iPad/iPod Touch, you know what you're getting yourself into.  You're giving away your rights to have apps that Apple deems inappropriate.   Companies intrinsically don't fall under Locke's maxims of government, and so I don't see why this is a big deal.

In regard to Apple being the savior of publishing -- I don't think I ever saw them as that.  I think it would be interesting to see if books like "TTYL L8R G8R" (#1 most challenged book) series got banned on iBooks, but even if they did, I don't think that it says anything more than Apple being Apple.  They've always ruled their product with an iron fist.  It leads to good and bad things.  Ultimately, we can either take it or leave it, but the choice is still our own.