I agree that it has problems (visibility of quality apps, abundance of trashy apps, high competition) but profitability does not seem to be one of them.
EDIT: (Answer to TorKlinberg below) I guess so, I don't see why it should not figure. "People don't like it" it's just an opinion which I don't see being backed up by data, in the end people "like" with their wallets.
App store revenue includes in-app purchases, right?
Does Apple publish the percentage of revenue that is from in-app purchases, and specifically game microtransactions?