Nothing in PhoneGap is against the TOS. It's a wrapper around HTML and JS, providing in WebKit's javascript engine access to system services. In that sense, it's not against the part of the TOS which says specifically you can use Webkit.
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.