It might be a stretch to call it an innovation on Apple's part, but Apple certainly seems to be the first to get it right.
The success of the App Store I think is very strong evidence that people will pay for things if:
- They think it is a good product
- It is reasonably priced
- The purchase process is easy and fast
- They trust the store with their payment info
I think the ability to get customers to actually part with their money has drawn a lot of developers to the App Store. Sure I can write a quick flash game and toss it up on a website, but how to I get paid? Adds seem to be the only thing going, but it doesn't seem like there's a lot of independent software developers making a living off web based apps. Sure the big players can make it work, but for a lone developer with an idea to earn a living on the web usually requires venture capital, and years of planning. There are plenty of people making a living selling software in the App Store now, and they don't have VC partners to pay back eventually.
I think this also serves as strong evidence refuting some industry perspectives (RIAA/MPAA/etc) who think that the world is full of thieves, and only laws and technology will save their dying business models.