I think the extension of the ban can result in a pretty big deal. I think the bigger issue is that now, Lua itself seems to be entirely banned for use in any app for the iPhone OS product family, even if the app itself is written in Obj/C/++ and just using the Lua engine for internal stuff - a perfect example would be Lua's popular use for "scripting" NPC actions and game events in f.e. World of Warcraft and many, many other online games; World of Warcraft is not written in Lua, it's written in C/++, but uses Lua as a component for "internal" stuff. By this new decision, all apps building on similar functionality would be rejected.

I still maintain my stance regarding the main culprit in this debate, being that Flash should be set fire to and urinated on for the shitty product it is, but I definitely feel that the collateral Apple is causing here is a potentially much larger problem than the Flash problem they solved by the ban.