Gizmodo Article
Pulse's offence? Apparently it's all because they used a photo of their app in action with the NYT RSS feed as one of the three on the screen.
Ironically, an earlier article in the NYT online praising the app and its creators, has the offending photo prominently displayed:
NYT Article
I have the reader, btw, and it's a top notch, incredibly fast reader.
I've already expressed my disgust to both the iTunes store and the NYT editor.