Yes - at least I would agree with that. I would also say that
1) this service is not a good thing
2) this service is illegal
If this MonkeyParking asshat is looking to go to the Supreme Court with this, I think he'll find that it will be a very expensive trip, and he'll lose long before he gets there.
As for the "holding a place in line" question, the line may be on a public sidewalk, but the "place" is not a public resource. The city of San Francisco doesn't have an interest in the line to buy an iPad. Now if someone were, say, renting plots of lawn in a public park where there was a concert, that would be illegal too. And rightfully so.