The nightmare scenario under this agreement? You create a great work of staggering literary genius that you think you can sell for 5 or 10 bucks per copy. You craft it carefully in iBooks Author. You submit it to Apple. They reject it. Under this license agreement [...] they won’t sell it, and you can’t legally sell it elsewhere.
For those with a lack of experience in the publishing industry, I'll go ahead and tell you: this is insane. It's akin to Microsoft saying "If you write your novel with MSWord, you can only publish it via Microsoft Reader." Wineman is correct when he calls this arrangement "unprecedented." I can't think of a single other case similar to this one.
Predictably, Apple evangelists have come out of the woodwork to decry that it's only fair that you can't sell your book anywhere else -- after all, Apple's product is freeeeee! And if they don't enforce this rule to make sure you don't, say, use iBooks Author to create a book and sell it on Kindle, then they're helping their competition!
First of all, the concept is ludicrous. Do they really think a large number of people are going to use iBA, and then not use iBooks? That's absurd. Most people who use Apple products do so because they like Apple. Furthermore, if that's really an issue, charge for the product. Do not justify whittling away an artist's rights because you can't bother coming up with a solid business plan.
It used to be that writers needed to worry about scammy publishers who wouldn't pay, or agents that would demand money up front. And while those things are still concerns, the actions of Big, Presumably Non-Scammy Companies are becoming more and more worrisome.
This exclusivity trend is starting to be a problem, and it's not just Apple. Kindle's recently introduced KDP Select program requires that they be the exclusive seller of the submitted book, whereas before they required only that you don't sell your book cheaper anywhere else. KDP Select is essentially a book loaning program -- there's absolutely nothing that requires exclusivity. Amazon simply introduced it here, where it would be less of a disruption. I wouldn't be surprised if they required the exclusivity for all Kindle Direct books in the near future.
So, self-publishers: keep your wits about you, and don't assume just because you're striking it out on your own that you're protected from the shenanigans of corporations that don't have your interest at heart. Remember Yog's Law: "Money flows toward the author." And remember that anyone asking for rights above-and-beyond "let us publish this" is essentially trying to take some of your cash.
UPDATE: Apple has changed ("clarified," they say) their EULA to say that you're only prohibited from selling the iBooks file you create with the iBook Author software -- not the content itself. This is certainly a welcome "clarification," though it's still an absurd restriction. Going with the MSWord metaphor above, imagine if Microsoft said "You can write your novel in Word, but you're not allowed to distribute the .doc file." What a helpful piece of software that would be.