Has apple nuked the fridge with their app store in particular and with the launch of the iPhone 2.0 in general?

Don't get angry at me, Apple fun boys. I am one of you. I own several Apple Inc. products and I am happy with the most of them. But there is a troubling tendency in how Apple handles many things of the late.

When I bought my original iPhone on the June 29 of 2007 I did not buy it for the superior technological advantage it supposedly had over the competitors. In fact it did not have any technological advantages. There were faster phones, with higher speed networks available, phones with longer spec and features lists. But none of that mattered. What mattered the most was the consumer friendliness, the ease of use and user satisfaction. In other words it simply worked.

So, when the new iPhone was announced, I was happy to learn that all of that user friendliness will now come in a more robust package with the faster network speeds and the GPS. Or so I thought.
Apple began destroying the experience by requiring the in-store activation. My decision to own an iPhone in the first place was partially based on the fact that I would not need to deal with the mindless drones behind the desks of the regular phone company store. You will say that Apple Store employees are much better, and I will agree with that. But I must point out that, even with the friendliness of the Apple retail staff, the wait in line for a few hours was pretty much unbearable.

Then, of course, the app store on the iTunes.
The application updates process is still broken as of August 30th. Application versions are all mixed up. Wrong versions are being downloaded, and there is a difference between what the iPhone thinks has an upgrade available versus what the desktop version of the iTunes thinks. This is anything but "It Just Works" philosophy of the Apple we have grown to love.
Has apple nuked the fridge? Is it becoming a new Microsoft?

P.S. Don't even get me started on how long did it take me to configure a network with an Airport Extreme and an Airport Express on it, after the automatic configuration utility has failed.