I don't know about you, but if I were a phone developer and I had two choices:
1) Write an app that parses an XML library and sends that information to my phone and requires the user to install the app on their PC in order to work.
2) Change the product ID that the phone looks like an iPod, saving me time and effort and more importantly removing the requirement for the user to install additional software.
Personally, I would choose #2. It certainly isn't illegal to change the product ID broad casted over USB. You might be able to argue that it is unethical, but I would counter that with the argument that it is more unethical for Apple to lock competing products out if that functionality. This is exactly the kind of behavior that Microsoft got in trouble for a good decade ago, having features that only MS products could access.