Bad for sure, as that's getting into censoring content and stifling speech.
I can more deal with them rejecting apps that they feel don't fit with their user experience, open security holes etc.
And I can understand not wanting apps with adult content, profanity etc.--though I don't like it. But if they want their store to be family friendly I respect their right to do so.
But it's going to far when they're banning apps for poking fun at apple, and sets a dangerous precedent for just banning things for opinions they disagree with rather than the type of app they don't want, profanity, nudity etc.
I just hope some other companies don't drop the ball and make a tablet that's just a slick and easy to use as the iPad, but has a real file system, an open app system etc. I really, really want a tablet, but stuff like this makes me hesitant to buy an iPad even though I really like it's functionality in most respects from playing around with my girlfriend's iPad.