Many developers were initially upset about this policy change, however now sources say that app rejections have declined and the policy is being rolled back. In addition, some of the initial app rejections are being overturned and the apps are being allowed back in the App Store.
Apple currently rejects apps from developers who offers incentives to get users to review their app, rate their app, or download other apps, however simply watching a video ad to earn an incentive is now allowed. Developers usually incentivize social sharing by rewarding users with an extra life or more virtual currency. For instance, Candy Crush would display messages to users that they could earn more lives if they post to Facebook. The rule now seems to be that you can incentive watching ads and social sharing, however such incentive cannot impact that apps downloads or rankings.
Basically, developers are fine to reward viewing video ads, whether for their own apps, those belonging to others, or brand ads, but they can’t reward anything that also has a direct download piece to it.
One source says that Apple's iAd team was reportedly behind the initial push in getting incentivized video/social apps rejected, however another source refutes that claim. These changes come ahead of iOS 8's launch which will bring welcomed features such as an improved search, an Explore feature, app bundles, and more.