1) We have never bundled a VM with any Eclipse deliverable before. Why would we start now?
Because Apple is changing the rules :)
Are you saying there is no other way to build Java applications on the Mac now?
That is correct. All Java applications distributed via the Mac Store and the iOS AppSore will have to bundle a JRE.
2) If it's just about delivery through the app store, then shouldn't that be an issue for *products* built on top of Eclipse rather than the SDK?
Yes. However, this will be true for all products built on top of Eclipse (including RCP-based products) that wish to distribute via the Mac Store. So if we don't ensure that this works, we are damaging the Eclipse ecosystem's ability to market on the Apple platform.
3) Will sandboxing be a requirement for all apps or just for those delivered through the app store?
Just those delivered via the Mac Store. So far.
4) Who's looking at the licensing issues?
The Eclipse Foundation.