Apple instituted the 3.3.1 clause in order to lock out Adobe from offering a Flash based development platform for the iPhone. Adobe was offering a development tool that allowed flash developers to compile their programs into iPhone compatible binaries. There was no good reason for Apple to block this tool other than fear and loathing of Adobe.
Apple has conceded. They have essentially rescinded all of the madness associated with 3.3.1. This is an amazing turn of events. It is exceedingly rare for Apple to capitulate, and it can only mean that pressure from the popularity of the far more open Android has taken its toll. It looks to me like the accelerating rate of Android app development and user adoption has apple concerned, as well they should be.
To be clear, I am a Mac, iPhone, and iPad user. I love their products. But I have hated many of their policies and business practices. This change does not lead me to believe that Apple has changed its philosophy, but I am ecstatic that competition from Android is forcing Apple to make the iPhone a more competitive, more open, and therefore better platform for users and developers.