Apple's inconsistency about what is and is not allowed in the App Store is one of the most frustrating things about developing for their platform. They should be clear and consistent. It's fine to expand the capabilities of the platform (it seems silly that iOS apps can't use USB), but Apple needs to announce when things that were disallowed are now OK.
Do you have any concerns about doing the research and confirming the market exists for this product and then getting 'Sherlocked'? Did you spend any time evaluating other platforms such as Android? I understand from my own experience how challenging that platform can be, just curious to see if you looked into it as an alternative or hedge.
Rant/opinion incoming because I honestly don't know all of the anti-trust rules and such.
I see this as a serious question for Apple because it is entirely their fault that they may have harmed this company from a lot of revenue if they were allowed to use USB like Duet can. I'd suspect Duet wouldn't come out if this company or others can use USB in the first place.
Seriously, while I love Apple, I actually want this company to file a lawsuit against Apple for anti-competition violations. Apple is intentionally allowing one company to succeed based on this sole feature while preventing others from using the same feature.
And no, a legal wall garden or monopoly should not be allowed to favor one company over the rest. It must be equal to everybody or they should be fined severely and/or prevented from doing this again.