It's not much different to businesses that make products which are sold at big box stores like WalMart or Home Depot, which have the final say on which products they want to sell in their own stores.
One difference here is that by following the rules, anyone could have their product sold in the Apple Store. Meanwhile Target or WalMart would only offer mens socks from a very small number of different suppliers.
Another difference is that you can sell your product in Wal-Mart or Target or K-Mart or Sears or independent shops or even set up shop yourself.
With Apple, you spend a bunch of effort building an app, and then your (legitimate) options are to distribute it through the App Store, or give up.
It's easy to understand why companies are willing to enter into the App Store even though Apple can potentially sink them at any time. The reward is, to them, worth the risk. How much money has Spotify made over the years from iOS users that they wouldn't have made if they had decided not to even risk Apple's displeasure? And of course this current problem will be resolved quickly enough without wrecking Spotify's business.
One difference here is that by following the rules, anyone could have their product sold in the Apple Store. Meanwhile Target or WalMart would only offer mens socks from a very small number of different suppliers.