Apple warned it, and made through on it's threat. A recent firmware update for the iPhone bricked phones modified to run on other GSM networks besides AT&T. Of course, this will make many early adopters pretty mad. It is technically illegal to modify the phone's software though, which is ironic in the sense that it's not illegal to modify any other product on the market for one's own use.

Apple doesn't seem to be winning too many friends with the recent things they've been doing to the iPhone and iPod. Even long time Apple fans like me are asking a collective "WTF?" They certainly seem to be adopting some Microsoft-esque tactics as of late. While Apple is a big corporation, just like Microsoft and hardly has a clean conscience, such tactics seem out of character.

When it comes to issues of modded iPhones, I think there is only one person to blame for the issues and that's Apple itself. Apple said they didn't want people doing this, and they warned people that they would put a stop to it. However, it's fully Apple's fault since they released the most anticipated mobile device of the year through only ONE service provider in ONE country? Did they honestly think people would wait around in our instant gratification society, especially with sites like eBay that allow people to easily buy stuff world wide? I think too that they underestimated the technical know how people have today.
You just can't make exclusive deals like they did with AT&T anymore and hope nobody cares. People want as much choice as possible. While the iPhone is a good product, the business model behind it is very poor and extremely short sighted. Apple should replace all bricked iPhones, illegally modded or not. People put good money down for those, and legally bought them, either first or second hand. They should be allowed to run it on any compatible service provider they want. Well, looks like we have another Newton. Killed by poorly thought out business practices. In many ways, Apple is the mirror image of Microsoft. While Microsoft sells bad products with genius marketing, Apple fails to sell good products with poor business sense. Sounds to me like they need a shake up in the board room.