The argument, I would assume, is something more along the lines that high-quality applications strain under the load of 30% royalties paid to Apple. This is definitely true in some cases. Ebooks spring to mind as the most obvious example as most publishers don't have 30% in their margins to give.
I'm not sure I completely agree with the premise. I do think that as Apple continues to push against the developer community you'll see a continuing downward trend in average app quality. The de-facto culture of the .99 app has already driven much of that, but at some point more sophisticated developers are going to be looking for greener pastures away from Apples control. The question is: how hard can Apple squeeze before that happens?
I'm seeing some of it now. The better developers have seemed to only make half-hearted attempts at Android ports thus far. Their attention has been so focused on the Apple cash machine that it's made it difficult to shift focus. So you see a lot of inferior ports dotting the Android market. With the uncertainty that Apple is creating in the development community, I'm betting that you'll see more and more developers hedging their bets and building out much higher quality applications on Android.
I'm sure Google is doing everything possible to court that. In the end Android benefits not because everyone wholesale leaves the iOs ecosystem, but rather because they start putting some of those iOS dollars to work making things better on Android.
That's how Apple loses in the end. Android has a huge distribution advantage. These decisions serve to erode the iOS app advantage. Once Android has achieved level pegging in apps I see nothing stopping it from taking over the world.