The point is not that the App Store isn't an online service (although I would argue that it more "relies on" an online service), but that its role as part of the OS supersedes that.
I can't go back and edit my comment now, but to make it more clear I probably should have written something like:
> I strongly disagree that the iOS App Store should be treated as ___only___ an "internet service" rather than...
Why can't we just say internet service or not, privacy applies. My banking is done through internet services and I still have privacy expectations there.