Here's an explanation I would offer to a 12-year old to explain Apple's decision, but please bear in mind that it doesn't mean I agree with it:

There are many people in the world who use technology, but are offended by even the slightest sexual material. They might not have reasons for it that you and I would agree with, but that's beside the point. The point is that they can get very loud and insistent and they might go on TV saying that "Apple distributes smut" and whatnot. Apple wants to avoid that kind of hassle. There are different ways to do that, but the easiest for Apple is to simply reject any content they think might cause them this kind of trouble.