So how should Apple have played this?
Honest question: not trolling.
Batteries lose their ability to hold a charge - that's chemistry. So what should happen when the battery is no longer performant under load? Should this known behaviour be covered by a warranty? Would the average punter be happy for a thicker phone with a replaceable battery? You might be, but you're not the average punter; I suspect many wouldn't.
I personally think Apple were daft for not letting people know this was happening, and for not giving them some sort of setting to manage this from the get-go, but it's very difficult to word this in a way that won't panic the average consumer ('Hi, do you want your phone slow or crashy?')
Biting the hand that feeds IT
