a few points
First, I'm NOT a fan of Apples restrictions like this on devs and 3rd parties. i can understand in-development products and as-yet-unreleased NDAs, but when anyone who pays $99 can be a dev, an NDA on the terms of being one is kind of pointless...
As far as Apple's store? What's new, BestBuy can pull a product from their store for equally bizarre reasons, without explanation. If Apple doesn't like it, even if you followed their rules, you're subject to removal, and that'sd clearly disclosed in advance, so no one really should be bitching. its not like this CHANGED.
On "reverse engineering" sorry, i often agree with the EFF, but in this case they're wrong. You CAN reverse engineer software you;re licensed to own (under first sale doctrine and fair use) but a) only for non-commercial purposes, and b) the SDK is not sold, it's a service of a contract subscription and thus does not apply under first sale.
"don't hack our stuff, including anything you run the SDK or iPhone apps on." Duh. Standard. no news here. If there's no provided API, and you can't reverse engineer the tools, then is it really a jump in logic to think that hacking a device to inter operate with iTunes that's not an iPhone would somehow be OK?
"not libel" yup, standard. basically: You made it, we sold it FOR you, if you get sued that's YOUR problem, we only check to make sure it doesn't break our coding rules and general policies, you have to make sure it doesn't violate laws, patents, copyrights, and not injure people, etc... and you can't sue US for your loss because you did something we didn't like (or a customer didn't like). This is a VOLUNTARY system, accept it or leave.
iPhone is NOT the only choice of platform. It has a THRIVING development community, a secure device people trust and find easy to use, is compatible with lots of stuff they own, and is extremely popular. If you don;t like apple's policies after becoming a developer, Apple is more than happy to refund your $99 before you invest time and money in development and advertising something that might violate the policies defined. You can also always CALL apple and discuss a yet-to-be/in-development app and discuss possible infringement/acceptance. If you don;t like it, code for WinMo, RIM, Android, Symbian, or something else, YOU HAVE CHOICES (and many of them are equally restrictive, and becoming more so out of necesity for security and performance considerations)