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> Believe you me, I want these guys to succeed as much as anyone else, but... wouldn't keeping the payment processing for subscriptions OUTSIDE of the iOS app solve the issue?

What you're missing is the other rules which force you to offer purchase via IAP because you offer subscriptions outside the app, too. The following terms apply:

11.1 -- Apps that unlock or enable additional features or functionality with mechanisms other than the App Store, except as approved in section 11.13, will be rejected

11.12 -- Apps offering subscriptions must do so using IAP, Apple will share the same 70/30 revenue split with developers for these purchases, as set forth in the Developer Program License Agreement.

11.13 -- Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.

11.14 -- Apps that link to external mechanisms for purchasing content to be used in the app, such as a “buy" button that goes to a web site to purchase a digital book, will be rejected

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