I don't get what it is that you don't get.

The fear he has is that a Steve Jobs world is one in which the overall ecosystem for startups is significantly weaker than it would otherwise be. And the reason for that is that Apple will be a gate-keeper, and will be in a position to just take all of the most profitable ideas. It would be like how Microsoft dominated the world of desktop applications in the 1990s - not fun.

The question he was answering iPhone to was whether there exist, today, better business opportunities in the iPhone space or Android space. If you're going to target one, absolutely there are better profit opportunities in the iPhone space. It is kind of like how in the 1990s, despite Microsoft being a major bully in the Windows ecosystem, marketshare meant that there were still better business opportunities doing desktop applications for Windows than for Linux or Mac.

The two questions have little to do with each other.

Because he wants business models for his startups which don't require (too much) miracles?

Because PG's realistic. Not a whole lot of non-iPhone mobile apps making money (or even gaining much traction) these days.