Their greed and thirst for totalitarian control screwed them. They could have what they want right now. Everyone would have iPhones, the 160k Android devices being activated every day would be iPhones.
That isn't entirely true. If Apple didn't demand the total control that they do, the iPhone wouldn't be nearly as popular today as it is. You think AT&T would have marketed this ONE device to control the success of their company? Apple has always had great control over their brand which was smart. And up until now Apple didn't have any real competition, so they had no problem controlling their brand.