There still are- 148apps, appcraver, appvee, etc. Cumulatively they just don't push the kind of volume that the App Store itself does. A more distributed system is only better for folks whose apps can't hack it in the Top 5 of their given category.
All I'm arguing in favor of is multiple markets, which requires an unlocked device. If a software developer or consumer wants to use Apple's store, they can. If they want to use another, including Apple's they also have that choice. At the moment, you must use Apple's store. Currently, secondary markets, like appvee, have to first go through Apple's store for their secondary market to work with a locked iPhone.
Some believe that free markets produce better results and others don't believe this. Further, some that believe free markets are the best approach also believe that precluding competition should be unlawful. This is an ideological argument, so I'll get off my soapbox now.
