"We've reviewed C64 1.0 and determined that we cannot post this version of your iPhone application to the App Store because it violates the iPhone SDK Agreement 3.3.2," said Apple in the official rejection notice.
"[An application] may not itself install or launch other executable code by any means, including without limitation through the use of a plug-in architecture, calling other frameworks, other APIs or otherwise. No interpreted code may be downloaded and used in an Application except for code that is interpreted and run by Apple's Published APIs and built-in interpreter(s)," continued Apple.
It is important to note that the App store currently has "a number of similar applications, including programmable calculators and a Z-machine interpreter known as Frotz."