" to modders who install chips "
Nick, what have you been drinking when you wrote that ?? You had to be drunk... an iPhone is not unlocked (usually) by re-arranging its innards, you only need a few software modifications.

There WERE some early unlocking mods that messed with the hardware, but those did not involve modchips, only a few wires soldered in the right places.

In the United States, it reads on every U.S. bill:
"This note is legal tender for all debts public and private"

Is it even legal for Apple to prevent the use of cash? Credit cards aren't guaranteed to be accepted, but I believe that cash has to be.

It actually goes far beyond the cash, if you are not american you can’t buy an iphone either. Last week I tried to buy one at an apple store in Los Angeles CA and I was asked for an ID. When the salesman saw I was not from the US he refused to sell me the thing. He said the US law prohibited selling it to me. Even when I showed him I was an AT&T customer already. My job has me spending half of each month in the land of the “free” so I have a mobile line there.

Now, isn’t that some kind of discrimination or Illegal practice? To sell goods based on customer nationality or ethnic origins? The only thing I can say regarding this is that something is definitely not right with this company. This was going to be my first Apple product buy. Now I know that is not going to happen ever. And when did America ceased to be a continent anyway?

I don't know. As a product assembler/seller, Apple seems to be in a position to set the terms of sale.

If they say you can only pay in glass beads or velvet paintings of Elvis, who am I to argue?