Daring Fireball: The App Store's Exclusionary Policies:
If you only find out at the end of the development process that your app has been rejected — not for a technical problem that you can address but because Apple deems the entire concept to be out of bounds — then who is going to put serious time and talent into an iPhone app?
If there were other means of distributing iPhone apps — to put it in Paul Kafasis’s terms, if Apple’s were an App Store rather than the App Store — then it would be acceptable for Apple’s store to be exclusionary. But so long as it remains the sole means of distributing iPhone apps, then the policy for determining which apps get in must be inclusive, rather than exclusive, at least if there is to be a robust, innovative developer community for the iPhone like there exists for the Mac. An iPhone where you can’t compete against Apple’s own apps, or even where you can’t make fart jokes, isn’t much better than last year’s SDK-less iPhone but with games and to-do list apps.