Interesting... Apparently, no one knows - they are not very clear about rejection and there are no real rules or guidelines for how to avoid being rejected. I guess any service provider is entitled to deny services from some clients, so they aren't breaking any laws by rejecting some site, but the whole thing is a little fishy.
What's even more fishy is that trying to read a bit about your question, I found this site (through google of course...) and it's basically a short article about their rejection policies, I got a warning from google before entering the site that it might damage my computer - it didn't. But it does look like a fail attempt as a cover up.
Apparently, according to this article, all rejections are content based.
http://www.yi7so.com/Google_AdSense_Basics/index.htm
