That is different to executables (which run directly on a CPU).
Most data files are little more than scripts, that are interpreted by a host program. But you're not right on how programs load data files data is not always a program. But then I think it's too broad to ban all executable code since it covers emulation too. Unfortunately, the developer got distracted with a PC emulator, Aeumla, and abandoned the project.
The developer moved the app to Cydia after that, and worked on it there. That executed code could be further sandboxed to prevent viruses or malware. The app originally snuck on to the App Store, until Apple removed it (oddly enough, it is still downloadble from the Congolese App Store). I understand why Apple rejects executable code - it could allow app stores within an app for example unless prevented by further guidelines (not saying that's necessarily a bad thing, but thats's likely their angle). Had I known about running Xcode on Windows or about the solutions below, I mightve started building iPhone apps much earlier Rent a Mac. Isn't programs as data and data as programs the basic principle of computing?
For example, PDF files are themselves computer programs which instruct and iPad how to render a PDF visually. In reality, executing code in an emulator is what programs do. I think Apple's guideline rejecting executing code is needs to be eliminated - an emulator is an emulator.