I...I... I'm really damn confused by this.
Yes, it's almost as if it were some kind of "intermediary" or "translation layer".
(and yes, I have looked at their source and know how it works.)
"only code written in C, C++, and Objective-C may compile and directly link against the Documented APIs"
But I'm glad it sounds like Apple will allow it.
The reason PhoneGap is ok but Flash is not ok is that nobody controls web technologies, but Adobe controls Flash. PhoneGap developers are not writing for the "PhoneGap platform," they're writing web applications with a thin wrapper.
To be perfectly honest, I expect Apple to bring out their own wrapper at some point so that applications written with HTML5 and local persistence can be monetized in the app store.