Not necessarily disagreeing, but my key question here is: how will Apple handle lower-level development cases? It's not difficult to imagine a watered-down iPad

Not necessarily disagreeing, but my key question here is: how will Apple handle lower-level development cases? It's not difficult to imagine a watered-down iPad XCode shipping, but what about the tooling they use to build iOS itself? After all, Apple has to use something to develop iOS, and I think it's unlikely they'd create a special in-house operating system for the exclusive use of their OS development teams that's totally different than what they ship to consumers.