Makes for an attractive customer base. I know that there have been a number of studies, that found Apple apps make a great deal more money, per app, than Android ones (I'm sure there are special outliers in both camps, though).
I make free apps. In my case, it has nothing to do with "snobbery." I've just been doing it for most of my adult life, so I'm invested in the platform, like many of us do.
I also enjoy working in a challenging environment. I've learned to adapt.
In any case, their chunk of the market never came close to Microsoft's. Also, Microsoft aggressively went after the domains of other companies, like trying to take over the Web (with some success). Apple is protecting their own market.
You do have to be careful about cooking the goose that lays the golden eggs, though. I don't feel like people are actually "playing the tape through," and thinking about the long-term ramifications of these policies.