The reason for the rejection seem to be swear words in NIN's song The Downward Spiral; Reznor thinks it's hypocritical, because Apple carries the same song in their iTunes store. From the official NIN forums (warning: graphic language):
"Now, "The Downward Spiral" the album is not available anywhere in the iPhone app. The song "The Downward Spiral" I believe is in a podcast that can be streamed to the app.
Thanks Apple for the clear description of the problem - as in, what do you want us to change to get past your stupid fucking standards?
And while we're at it, I'll voice the same issue I had with Wal-Mart years ago, which is a matter of consistency and hypocrisy. Wal-Mart went on a rampage years ago insisting all music they carry be censored of all profanity and "clean" versions be made for them to carry. Bands (including Nirvana) tripped over themselves editing out words, changing album art, etc to meet Wal-Mart's standards of decency - because Wal-Mart sells a lot of records. NIN refused, and you'll notice a pretty empty NIN section at any Wal-Mart. My reasoning was this: I can understand if you want the moral posturing of not having any "indecent" material for sale - but you could literally turn around 180 degrees from where the NIN record would be and purchase the film "Scarface" completely uncensored, or buy a copy of Grand Theft Auto where you can be rewarded for beating up prostitutes. How does that make sense?
You can buy The Downward Fucking Spiral on iTunes, but you can't allow an iPhone app that may have a song with a bad word somewhere in it. (...) Come on Apple, think your policies through and for fuck's sake get your app approval scenario together."
High profile customer unhappy with the rejection? It has happened before; I'm sure that Apple will do what they can to straighten this mess out. The question is whether the uncompromising Reznor will be ready to accept what they have to offer. The really interesting bit is a couple of pages deep on the same forum:
"Android is cool, but nobody has an Android phone. Blackberry is OK but the hardware is inconsistent and WinMo straight-up sucks balls. If Apple doesn't get it together, we will most certainly make it available to the jailbreak community. I didn't invest in this app to see it languish on the sidelines from an idiotic policy while this tour is in full swing."