"How about you spend that fat cash on making a better product "
Because their proprietary closed shop prevents it. As the outsiders with the unique product, their R&D team has to try and beat the combined resources of every other phone manufacturer all by itself. It's not reasonable to expect them to beat everyone, and so now the field has caught up Apple will never be top of the line again. Since the sole justification for their inflated prices is that iProducts are top of the line, if Apple want to keep their position as top dog they have no recourse except to litigate.