You guys misunderstand the meaning of a "userland" exploit. It means that they were able to exploit an application that's supposed to run with the user's normal privileges (i.e. in userland), and use it to gain very low level access the system-- low enough to patch out the signature checks in the kernel, which is a necessary prerequisite to running Cydia. In some ways, a userland exploit is actually more severe than a hardware one, since it could potentially be used maliciously.
Oh come on, that's such a load of crap. His objections center around an inferior experience for the user, but that just doesn't make any sense. If Flash-based products are inferior, they consumers will vote with their dollars, and the platform will wither and die. Besides, if Apple is so concerned with the quality of the software available on their platforms, why are there so many terrible applications in the App Store? This is protectionism, plain and simple.
What security hole? The only security problem is that you're running a daemon that allows for remote login, and most people don't bother (or more likely don't know enough) to change the default password and/or kill the daemon when they aren't using it. His exploit is to write a script that 1) scans port 22 2) attempts to use root/alpine if it gets a reply 3) changes your wallpaper to one with his warning. Not exactly a sophisticated attack.
Except that you'd never be running an SSH daemon if the first place if you weren't running a hacked phone. There are a lot of things to be annoyed at Apple for, but this isn't one of them.
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