The company has gone on the offensive, using the DMCA as their weapon of choice. Apple claims that The Cydia Store, along with jailbreaking, represent illegal use of the iPhone. No matter how much you paid for your phone, they assert that they still own the software it runs. Ultimately, Apple's destination will be the courts – where they will try to make jailbreaks officially illegal and get outfits like Cydia shut down.
The iPhone App store is one of Apple's fastest-growing cash cows, and they will take any threat to it, no matter how small, seriously. I wonder what their reaction would be towards an application store that didn't charge for apps, only provided apps that Apple had previously rejected.