I hope Apple gets trounced for this ridiculous policy. Arrogance is not attractive and generally bad for business. This is one of the reasons I haven't started iPhone development.
Most hardware and OS providers are happy to have additional tools and audience to write to their platform. Apple is taking the stance that its (braindead) tools are the only game in town.
The "Big Brother" ad from 1984 is more and more relevant...
EDIT
The way it is written also seems to imply that if I wrote a .net to objective C/apple translator that the code isn't acceptable because the original code was not objective c. That is ludicrous (and unenforceable.)
