I'll have to respectfully disagree with this premise; my Audiovox 6700 (which, BTW, runs circles around an iphone) can be freely configured to run on any CDMA network. Likewise, there are a plethora of CDMA and GSM smartphones on the market today that can run on any network in the world and run any available Windows or Linux-based program depending on the OS. I can run literally tens of thousands of freely available open-source and proprietary programs on my phone doing everything from telling the tides in the Marianas to running terminal server.
A more valid analogy may be to say: "If you wrote a custom BIOS for your PC and you updated Windows and it permanently disabled your machine from ever running Linux, is this an ethical business practice"?
Ethical or not? It's a business model where Apple get's some money from selling the phone, and some more as a percentage of the users phone bill. Would it be more ethical to charge double for the phone and let you use it freely? Personally I think the best option would have been to offer both options and let the customer choose, but who am I to decide for them?
I don't live in the US, but I've understood that many operators offer free or cheap phones that are tied to the operator and subscription. Sure you can get the same phone without that subscription, but the price is different.
The real question here is: "Did Apple intentionally , as opposed to inadvertently engineer this update to permanently disable the phone"?
From all that I've read regarding this issue, the answer is a resounding "yes". It also follows that Apple is very much aware of what their patches do and don't do and it's highly unlikely that they'd "accidentally" include code that just happens to target modified phones, all but permanently disabling them.
What was the modification based on? As far as I understood they where using some kind of buffer under-run or other flaw in the operating system running on the phone. That same bug could be used to create a virus for the phone, and if that is the case it would have been unethical not to patch the flaw.
There is no force upgrade, each user decides himself if he want's to do it or not. I find this whole issue to be pretty ridiculous, as in nobody should really have even thought that they would not go ahead and break the hacks.
I read through the article and found it to be very funny. Now I really like the ability to do what I want with my hardware, and run Linux on most of my computers. However it's still good to take things for what they are, and nobody should have thought they are getting an "open device" that can be hacked like they want when acquiring an iPhone.
But of course it's a juicy issue as there are good arguments in either way. Great opportunity to bash Apple
edit:
According to
this page the iPhone is truly hacked by using a memory buffer overflow, you would have to be stupid to not expect it to be fixed in a new firmware.