Welcome to WebmasterWorld Guest from 126.96.36.199
This was a new site, using Xoops, light on content yet (but not non-existent). Not yet indexed by Google. All database driven, and regionally focussed.
There was no reason given except the "policies" and I can't see I contravened them.
The acceptance process is highly automated with little human intervention to begin with. I'm sure they've got 100's of thousands of sites to review and accept and there is no way they're going to be able to review each one of them manually.
1) If you've submitted from an adwords account they probably have some filters which classify the type of traffic your site pays to attract.
2) If you're site is in Dmoz / Yahoo they know the category of your visitors and probably have a very good idea on what your CPM rates are going to be.
I bet all of this is presented in a very comprehensive editor review page with a "credit rating" of sorts. Sites with high ratings get accepted, sites with medium get a 30-60 second review and low sites get a form letter rejecting them.
Folks, these are not stupid or inept people you're dealing with. Look at their list of PhD hires, papers on textual analysis their datawarehouse of the internet and traffic patterns.
The last thing, they need is a dilution of the value of the click their advertisers pay for and they will protect that.