The fact remains that PastryKit is open source, but close-licensed - by which I mean the frontend source code is transmitted when you access the website by necessity, but owned entirely by Apple.
Honestly, Apple is behaving much like Plurk just a few days ago. Their frontend source code was lifted, unpacked, analyzed, and repackaged for another product. Frustrated by having their intellectual property repurposed without permission or license, a takedown order was appropriate.
While I'm all for analyzing techniques like those found in PastryKit and am sort of a "rah! rah! open source!" guy in general, Apple was well within their rights to request a takedown. It sucks that they did, because I'd love to read up on this sometime and learn from it, but that's how these things tend to go.
That said, whether you agree with me or not, I don't think that this takedown notice is any reason to suggest that "Apple is terrified of iPhone web apps being as good as native apps."