The Luna adapter and display software from Astropad turns your iPad into a wireless monitor, essentially without lag for your Mac – and the company wanted to make it even cooler by including a clever hack that has turned the front of the iPad -facing camera into a software button. But, unsurprisingly, Apple denied the feature by rejecting the update that included the functionality of the App Store.
The camera button was rejected in accordance with Section 2.5.9 of the App Store Review Guidelines, which states that applications that alter the behavior of native hardware or software components will be rejected. It's amorphous enough for it to apply if Apple feels inclined, which is obvious in this case.
Still, it's a bit of a shame, because developers are pushing the limits of APIs and development tools available for Apple, making apps, and iOS in general, better. This also seemed a great way to take a difficult UI problem and turn it into an innovative solution.
Astropad's Luna Display was awesome before the Camera button arrived, though, and it will stay awesome after he leaves – again, you have to feel the little guy in this scenario.