The fact of the matter is 1% of users root their Android Devices. Just like 1% jailbreak their iDevices.
What you are leaving out is the fact that the iPhone works, plain and simple. And works well. Battery will last all day without reaching for a charger. There are many reasons why a person chooses their device. When it comes to open source, Android and WinMo are the obvious that come to mind. When it comes to just getting a great phone you want to use without it force closing or battery drain from 80-20% in an hour or the need for unlocking rooting or jailbreaking, iPhone was a much better decision. Coming from the 99% us users. I think there are cool things happening within both Operating Systems. IMO.
But honestly, you can't debate the benefits from Andy to the average Joe. Chances are they are scared to death of Rooting or hacking and more importantly, they are the 99%.