Isaac is disappointed

At the start of the year we reported that approval was being sought for The Binding of Isaac on 3DS, a game co-created and developed by Edmund McMillen, one half of Super Meat Boy creators Team Meat. It's a title with its share of mature, controversial themes, while the plot references and re-tells a well known bible story. The actual structure is clearly inspired by RPG elements of 2D entries in The Legend of Zelda series, so it's a mix of a reasonably conventional game design and controversial content.

It seems like this mature content was too much for Nintendo, as it has rejected the title's potential publication. Posting on his Twitter page, Edmund McMillen confirmed the news.

Attention: After a long internal debate Nintendo has decided NOT to allow the Binding of Isaac on the 3ds. As many assumed the reasons were due to the games "questionable religious content". Thank GOD Steam exists!

Steam is a PC platform where many indie developers publish their titles, particularly as it doesn't require ESRB ranking or censorship of games. As it stands The Binding of Isaac won't be released on the 3DS in any form due to questionable content, and it seems like Steam will be the only platform with this title in the forseeble future.

What do you think of this decision? Should Nintendo allow games with controversial themes and rely on ratings and parental controls, or is it right to reject titles with 'questionable religious content'?