That's B.S. Apple shouldn't be able to reject an App. because it goes against company morals. eHarmoney was recently sued (and settled) because they pushed their morals in the operation of their business. They refused to allow homosexuals to use their site for finding a date. As part of the settlement, they are creating a site specifically to cater to homosexuals.
Maybe the difference is that the action would be illegal if done in real life? Even this argument fails though. There are plenty of games in which you "kill" other people in them. Last time I checked, killing someone is a worse crime than selling drugs. I'm not tempted to go kill someone because I did it on a game, so why would dopewars make someone more likely to be a drug dealer?