If you want to be an iPhone developer, you can start your twitchy fingers in about an hour, when the SDK will be available for download. It's free, but if you want to publish and distribute your programs through the iTunes App Store (the only way to do so) it'll run you $99 a year. On the bright side, budding programmers, there's a $100,000,000 iFund for developers, totally crushing Android's penny offerings. After that, Apple won't charge you anything to host or credit processing, if your app is free—otherwise they take 30 percent of the price you set. [Giz Liveblog]
I think it's pretty simple. And I'm taking your word for it that you're a developer, and not somebody who just wants to act like one to bitch about this deal: If you are a developer making an app worth anything to anybody, it will be easy for you to find a way to finance the $99, even if it's a "freeware".
E.g., there are many, MANY donation wares out there and, if you're really a developer worth a damn, you know those wares can rake in $100 easy. So, distribute it "free" on the iPhone App Store w/o restrictions, and ask for donations on your website.
And to reiterate what I said above, if your app isn't good enough to make me and another 98 people want to donate $1 each through Paypal, then frankly, your app doesn't deserve to be on the App Store.