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I think the whole idea of an approval process is fundamentally against a free market. This app was completely dumb but it really didn't break any rules, it just offended people. That shouldn't be grounds for removal from the App store. Anyway, it is what it is. Flame if you want, I won't read the post anyway.
If this app can be removed for being offsenive, the we should't hear any complains when others are rejected, it might be offensive to others.