I would say that what I, and others, did was more like someone going to a website, hitting view-source, and saying "hmm this is interesting, there is something to be learned here" and then putting the interesting code snippets up on their blog. especially when the first line of my readme said "this is just for learning's sake, dont use this on your real website."
At any rate, I for sure agree that apple is not being a bully, unjust, or outside of their rights to tell me to take it down. But it does kind of suggest that apple is going out of their way to impede the quality of web-apps on the iphone rather than try to help it along.
Apple if your listening, why not just open source PastryKit?