Maybe they need a new permissions category
Well first of all this is sort of theoretical. Apple reviews apps before they hit the app store, and while that process most certainly isn't 100% they do reportedly look at the APIs being accessed so an app that was supposedly only accessing your photo library for an avatar on a message board turned out to be using the video camera API it'll probably get flagged and rejected. Even if something gets through, if an app is being actively evil like taking pictures of people without permission Apple can disable it on everyone's phones (pretty sure Google can do this as well, and actually did it for at least one app in the past)
Anyway, one possible solution is that they could separate the permissions for the camera from permissions for accessing your photo library, so an app that only needed to grab a photo couldn't take pictures. But that still leaves the possibility that once it has that permission which you only gave it to access one photo it could download all of them. Depending on what sort of photos you have taken or saved on your phone, that might be even worse than accessing your camera.
Instead of making permissions either off or on - which "on" being permanent until you turn it off again maybe add a third option to approve just a specific access. So if an app needs to access your camera (like the app I use to check lottery tickets which uses the camera to look at the QR code and tell me if it was a winner or not) then I could approve it just that one time. Maybe it would remember that setting for a few minutes, in case I wanted to check another ticket, or in a different app if you wanted to access multiple photos from your library.
Finally, this isn't exactly unique to iOS. I don't know if Android would have the same issue, but I'm guessing so. But far worse is Windows - there is no per application permission for the camera. That's why so many people disable the camera in their BIOS, or put tape over it. Even if you don't have any applications doing bad stuff, you could always get malware that does. A PC that takes pictures/video while unattended may be even worse than a phone, if you leave the lid up. Depending on where it is left, it could record kids getting undressed, sleeping, or whatever. But yeah, let's ignore Windows and worry about phones that at least try to do the right thing by having permissions, but just don't quite go far enough...