Does that matter? The majority of the 3rd party applications aren't really worth installing now anyway (imo). Installer.app will be irrelevant and the iTunes music store eventually is going to evolve so you can download your favorite applications right to the iPhone.
As for free applications, there's plenty of free stuff on iTunes now, ie podcasts and music, so why not applications? Apple will let developers choose what price to put on their iPhone application (free or not). I'm surprised so many people don't see the big picture here.
You're judging something that doesn't even exist yet. I'd expect plenty of Mac OS X developers to eventually jump on the bandwagon here, once they have the go-ahead from Apple, myself included. What's available now is only a pitiful sample of applications from dedicated hackers...
One thing is for sure: Apple will announce the availability of an SDK at Macworld in January and a new iPhone model as well.