Clearly the success of the app store shows that there's a desire to extend the functionality of the phone. Apple just doesn't believe that there's a reasonable need to do it beyond a certain point or to do it without their permission.
However, no one is clamoring to write apps for a microwave. A microwave really just has one function and as long as it does that one thing then it doesn't really matter how the software works.
What if I want to change what the buttons do? On my microwave, you have to type in the power setting before the time, what if I always want to default to 100% power unless I hit a specific button first? What if I want to hook a smoke detector up to the microwave so it will automatically shut off if its burning something?