This is because the value for rotate angle is absolute, not based on the last rotate.
Working code:
jQuery
var rotate_factor = 0;
function rotateMe(e) {
rotate_factor += 1;
var rotate_angle = (180 * rotate_factor) % 360;
$(e).rotate({angle:rotate_angle});
}
HTML
Update: Shorter code
var rotate_angle = 0;