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If I understood the story correctly the app asked permission to access the information and the user gave permission. I haven't spent enough time on Android yet but Unix and Linux generally work that way. You don't run apps as root and you can protect stuff from apps that don't have access rights. I'd rather rely on a solid operating system, and I'd expect both the iPhone OS and Android to be similar.
The problem with the walled garden is that it gives Apple the chance to restrict innovation. For example, you think of an ultra cool idea for an app. Apple likes it so much they take your idea, write their own app, and won't stock yours. Not saying this has happened, just that there's nothing to stop it happening. As a developer I can't invest in that platform.
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