Take a pause and think about what that "originally" really means.
Developers are not free to use any tools to help them. If there is some tool that converts some Pascal or, Ruby, or Java into Objective-C it is out of bounds, because then the code is not "originally" written in C.
Yes it is "originally" written in C - when the Objective-C compiler first sees it. There's nothing in the quoted clause from the Apple T&Cs that says "written == written by a human".
I really don't think this clause is aimed at code converters, but rather at e.g. run-times that execute byte code - see also "(e.g., Applications that link to Documented APIs through an intermediary translation or compatibility layer or tool are prohibited)". You don't link to an API until either compile- or run-time. Making an API call from a piece of code that is then converted into C is not 'linking to APIs through an intermediary layer'.
OK, it still sucks, but it seems to me that both this article and the other similar one on here at the moment ("Apple takes stance on consciousness", http://news.ycombinator.com/item?id=1252438) are based largely on a misinterpretation of the use of the word 'originally'.