Why is @twitter monopolizing URL-shortening? how will this affect us?

I received the following notice by email from Twitter. As I understand it, they're intending to monopolize all URL-shortening used on Twitter by the end of the year.

I have 3 questions. Question number 2 is rhetorical.

1. Am I reading this right?

2. Why are they really doing this?

3. How will it affect us to have no choice on URL-shortening?

Update 2: t.co URL wrapping

In the coming weeks, we will be expanding the roll-out of our link wrapping service t.co, which wraps links in Tweets with a new, simplified link. Wrapped links are displayed in a way that is easier to read, with the actual domain and part of the URL showing, so that you know what you are clicking on. When you click on a wrapped link, your request will pass through the Twitter service to check if the destination site is known to contain malware, and we then will forward you on to the destination URL. All of that should happen in an instant.

You will start seeing these links on certain accounts that have opted-in to the service; we expect to roll this out to all users by the end of the year. When this happens, all links shared on Twitter.com or third-party apps will be wrapped with a t.co URL.

What does this mean for me?

* A really long link such as http://www.amazon.com/Delivering-Happiness-Profits-Passion-Purpose/dp/0446563048 might be wrapped as http://t.co/DRo0trj for display on SMS, but it could be displayed to web or application users as amazon.com/Delivering- or as the whole URL or page title.
* You will start seeing links in a way that removes the obscurity of shortened links and lets you know where each link will take you.
* When you click on these links from Twitter.com or a Twitter application, Twitter will log that click. We hope to use this data to provide better and more relevant content to you over time.

Thanks for reading this important update. Come and check what's new at http://twitter.com.

Thanks,
The Twitter Team

A lack of competition always hurts consumers. If we're stuck with Twitter's url-shortening, it seems to me, this can only hurt us.

I wonder if it's legal for Twitter to condition our use of Twitter on our use of its URL-shortening service.

Sounds like an unlawful tie-in, similar to Microsoft's initial attempt to force Windows users to use only Internet Explorer.

It's an attempt by Twitter to leverage its strong position in one market -- a preeminent position in socially interactive microblogging -- into a monopoly position in what is presently a wildly competitive market in which it has no presence at all -- URL shortening.

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