Actually, yes, grocery stores in Germany may sell porn (if they sell magazines). From more classy stuff like Playboy and FHM to just downright cheap and simple porn magazines. Slightly hidden away so you only see the titles, of course. (And England has the famous "page three girls" in their newspapers.)
Of course it's Apple's legal right to deny what they want. That doesn't mean that I think it's right that they have that right. Apple is a quasi-monopoly, and people are dependent on them. There is no second app store for iOS devices really. A more fitting analogy would be when the postal service would decline to transport mail with porn in it. Would that be a good situation?
I'm sure if they would take away the porn magazines (even if the grocery stores just use their legal right to stock only whatever products they want), many people would scream bloody murder. But in the digital world, we are so used to clean walled gardens, that nobody cares. It's a bit like the movie Demolition Man...