I really don't get it... is there really any demand for this anymore?

Sure, you can jailbreak your phone, to let you customize it to so some (but not close to all) of the things Android can do out-of-the-box.

And "THE" argument for the lack of certain customizability and constrained functionality being "iphone is easy to use, for people who don't want to hack and customize their phone".

So for someone who obviously IS enough of a hacker that they DO want to hack and customize their phone - they'd more than likely (more than logically) would have an Android phone - and might even choose to root it to move at least two steps further down the chain than you can get with an iPhone after a monumental hacking effort to even develop this jailbreak in Apple's closed codebase:

1) what a stock iPhone can do

2) what a jailbroken iPhone can do

3) what a stock Android phone can do

4) what a rooted Android phone can do

5) what a rooted/rommed Android phone can do

One reason this has taken so long has got to be simply due to these practical considerations.

Unless you are forced onto an iPhone, it's certainly not the hacker or tweaker's platform of choice. In 2011 there are now 2x as many Android users - and developers - on the scene vs. iOS developers. My guess is that "jailbreaking" is not only something that is frustratingly actively pursued and shut down by Apple in today's world, but there are fewer developers pursuing this difficult "and for what?" path.