Actually, using a non-standard A/V cable was a practical idea by Apple. It allows you to use ordinary headphones or an ordinary audio cable to connect the iPod to your stereo. Let's look at details:
The standard stereo/headphone plug has three contacts (from the tip):
right (white), left (red), GND.
The standard A/V cable plug has four contacts (again from the plug's tip):
right (white), video (yellow), GND, left (red).
Apple's A/V cable is
right (white), left (red), GND, video (yellow),
which makes much more sense as the first three contacts are compatable with standard headphones or a standard audio cable.