I don't think Apple blocks Firefox on iOS. Other browsers like Opera exist in the App Store, maybe Mozilla just hasn't developed FF for iOS yet? Or am I wrong?
Apple blocks all non-Safari browsers from the store. Opera Mobile doesn't exist in the App store, only Opera Mini which uses a remote server for rendering. Other browsers in the store use iOS webkit and are effectively shells around the Safari rendering engine.
Chrome started as "effectively a shell" around webkit. As far as most end users are concerned, the difference between browsers is the UI, not the rendering engine. I use iCab on iOS for its UI and amazing feature set (including Adblock and extensions), and apprececiate the choice. In fact, it syncs with Firefox bookmarks. Atomic is also nice.
It would be very interesting to do a Firefox-like UI for iOS and see what the end user uptake would be.
We have no plans to release the full Firefox browser for iOS. The iOS SDK agreement requires apps to use Apple's own JavaScript engine (or none at all, like Opera Mini which downloads pre-rendered pages from Opera's servers and cannot run JavaScript code in the client). Because of this, we have no supported way to distribute Firefox's rendering and JavaScript engine to iPhone users.
However, you can download Firefox Home for iPhone, an iOS app that uses Firefox Sync to deliver Firefox bookmarks, browsing history, and tabs to your iPhone or iPod Touch.