So how is this any different from a Mom & Pop bookstore electing not to carry books they find offensive? If Apple were run by the Government it would fall under the First Amendment, but this self-censorship of goods offered for sale shouldn't surprise anyone by now.
Like the guy in the song sang, if you don't want an Apple, don't buy it. If the fact that you won't be able to subscribe to Hustler via your iPad frosts your cookies, wait for the Android tablets that are soon to be released. Or use a notebook. Or a Kindle.
Now, if Apple is black-boxing certain passages in the iBook text, my concern would be if there was a parental control that I could use to set a ratings limit. So far, the parental limits in iOS are to simply disable the App when the limit is activated. If I paid for "Stranger in a Strange Land" I want to read the whole text, not some watered-down version.