BS. MS cared very, very much about what software you ran. Remember Netscape? Borland? Microsoft J++? They put pressure on OEMs not to ship Netscape that make anything Apple's done with iOS pale in comparison.
It may be hard to appreciate today, but in the 90's you couldn't start a software company without a ready answer for how you were going to survive if MS decided they had to kill your product to protect the Windows monopoly.
There is a difference between competing in a business environment and limiting what your customers can do with your product. Although competition may indirectly determine what customers can do (by destroying businesses that may have created software they wanted) it is different from directly controlling what customers can do the way Apple does.
I don't think anyone claimed that Apple's e.g. censoring porn is the same kind as Microsoft murdering competition and slowing down development.
For porn -- relax, much online video works on the iPad. :-)
I would argue almost all areas is better with competition. If you prefer monopoly solutions, there is still North Korea (Cuba will go a bit capitalism, I've seen).
It may be hard to appreciate today, but in the 90's you couldn't start a software company without a ready answer for how you were going to survive if MS decided they had to kill your product to protect the Windows monopoly.