Last week the first iPhone (and iPod touch) app to feature nudity was live in the iTunes App Store. Technically, however, it was simply a change in the server behind the app -- the developer added nude images.

Subsequently, however, the app became unavailable. The developer first reported that their own servers couldn't keep up with demand for the newly nudified images, but it turns out Apple laid the hammer down on the "soft-core porn" app:

Apple will not distribute applications that contain inappropriate content, such as pornography. The developer of this application added inappropriate content directly from their server after the application had been approved and distributed, and after the developer had subsequently been asked to remove some offensive content. This was a direct violation of the terms of the iPhone Developer Program. The application is no longer available on the App Store.

Given that Apple has included new parental controls and App Store restrictions in iPhone 3.0, including a declaration for nude content, and given the eternal argument that nudity is available for age-appropriate viewers via iTunes movies, is there some contradiction still at work? Or is Apple drawing the line artificially close for now while it watches and gauges reaction?