The server could just give the requesting device what it needs to display the content in both orientations. That doesn't necessitate also giving it the layout for 10 other possible screen sizes.
Only politicians have to pretend that everyone is 100% equal in every way, because they can't afford to offend anyone. pg, on the other hand, doesn't need to worry about that as much because what matters is whether the startup is successful or not. If there is a pattern indicating that a certain group of people are particularly bad at running a business, why should he take the higher risk associated with investing in them?
Bad idea, perhaps. But why should Apple get to determine what is or isn't a bad idea for one to do with their own phone? (Although I would suspect part of the reason they banned it is to avoid claims of "Apple's so greedy that while they ban so many legitimately useful apps they allowed this one, just because it can break phones resulting in added profits for them from people buying replacement phones".)