I think there is a certain amount of laugh test failure to the "ISP is distributing too!" argument. I see it as akin to the USPS and FedEx being required to pay royalties to the music companies for distributing the music.
As for what the FSF is arguing, it is that iTunes has a blanket license that limits how many devices you can use the app on, which is pretty much against the part of the GPL that says you can't restrict the license further, or add any additional clauses.
Further, Apple may be required to host the source themselves as intermediary distributors of GPL software (by which I mean make available to additional customers beyond the original authors' reach, not act as a shipping company -- i.e. they are resellers).
I don't think the original author's actually violate the GPL, they provide the source to Apple... and they probably don't restrict the license at all.
As for what the FSF is arguing, it is that iTunes has a blanket license that limits how many devices you can use the app on, which is pretty much against the part of the GPL that says you can't restrict the license further, or add any additional clauses.
Further, Apple may be required to host the source themselves as intermediary distributors of GPL software (by which I mean make available to additional customers beyond the original authors' reach, not act as a shipping company -- i.e. they are resellers).
I don't think the original author's actually violate the GPL, they provide the source to Apple... and they probably don't restrict the license at all.