At the risk of being labeled an Apple-apologist, here goes:
First of all, Apple doesn't deserve all the blame for the upgrade issue. There are thousands of other developers making software that requires the latest version of the OS, too. Sometimes there are reasons a decision like that is made, though. Tiger introduced Core Data and Core Image, along with numerous other API enhancements that offer more options to developers. Sure, it may seem like a lot of Apple's requirements arbitrarily increase with each OS upgrade, but sometimes it's because the new version uses functions that weren't available before.
As for the iPod issues, you're losing sight of it's intended purpose. It's not meant to be a backup device or a full-featured portable hard drive. It's supposed to play music and let you look at pictures and videos. Also, it's a consumer electronic - a market that doesn't really lend itself to upgrading existing devices. Apple is in the business of selling iPods; when they release new features, they do it because they want you to buy a new one. And besides, if you can't trust your kids to listen to the iPod at a reasonable volume, maybe you shouldn't let them have them in the first place.
The warranty situation sucks. Once again, it's not Apple's responsibility to make sure you have proper documenation though. It's your job to have it, and it's your reseller's job to make you they give it to you. Unless you bought it from Apple it's not really their fault. I know from experience that resellers aren't always reliable with that stuff (especially campus stores) - in December my reseller told me that my dead iBook wasn't covered under the Logic Board Repair Program and because I didn't have the time to waste to get a second opinion from Apple, I ended up buying a new computer. It wasn't until a month later when I finally had time to get in touch with Apple that I discovered they would have actually fixed the iBook for free. And they were incredible fast and helpful when the ball was finally in their court.
And finally, when it comes to the merge vs. replace debate, I don't see what's so confusing about a dialog box that explicit says it's going to REPLACE the item (in this case a folder). As has been said before, this is the way Macs have always functioned, and it's not Apple's fault that you're expecting it to work like a different platform. Is it also Apple's fault that the Home and End keys don't work the way they do in Windows?
Don't forget when IBM started work on OS/2 they co-developed it with Microsoft. So without MS around, who knows if it would have happened at all or what it would have been like.
It doesn't matter how many other operating systems I can have running along side OS X because there's still the issue of conflicting file systems.
OS X can read and write to FAT32, but pretty much anyone using the newest versions of Windows is using NTFS - which is read only in OS X. And Windows doesn't support HFS in any form at all.
That's why something like Virtual PC is still necessary to deal with issues like that. If I can't easily share files between the multiple OSes on my machine, I might as well have a cheap second box and network them together because that's about the only way to accomplish the task.
Comparing the saturation of Apple Stores to IKEA or Disney ignores another important element: There may be 4 stores in the Boston metro area where you can buy an iMac, but think of how many Best Buys and Staples and other PC vendors there are in that same area.
A lot of people, especially those considering switching, want to go into a store and play around with a computer before they buy it. And since Apple hasn't been advertising any other than the iPod recently, a strong retail presence is one way to get people to see their products and seriously consider buying them.
Apple: The Bad and the Ugly. And Some Good
What if Microsoft Never Existed, Part 3: Amiga, HP, Dell and IBM
The Trojan iLife
Apple and the Disney Store Effect