And yet there are tons of Christian-oriented apps available. I recall this particular story and my impression was that the makers "Manhattan Declaration" app knew they were violating the TOS and did so to get the publicity associated with being "persecuted" by Apple.
Now, granted, Apple has pretty rigid terms or service for the App Store and many people find them overly restrictive. But you know what? Code it up as an HTML 5 web page and any mobile browser, including Safari on iOS devices, can access it. It doesn't have to be an "App" to be used by the device.
I read an interesting article a couple months ago about Bob Borchers, who was part of the original iPhone team. Supposedly, Apple originally envisioned that developers would create web apps that ran inside the Safari browser. Developers complained, and sometime after the iPhone was launched they allowed the developers to write native apps. That is what made the iPhone a success (and the iPad that is similarly used). The native apps are much faster and more appealing than web apps.