That is a great explanation of what vertical integration is. I am not sure I see why it is inherently bad.
I guess a large vertically integrated option could make it hard for alternatives to compete. That is more of a monopoly problem than a vertical integration issue though.
I do agree with interoperability requirements though. I see nothing wrong with Apple offering a fully vertically integrated product. The issue is when I cannot run my own OS on the hardware, my own apps on their OS, or interact with hardware from other vendors.